US car rental company Hertz has announced it will sell 20,000 of its electric cars, about a third of its total, to replace them with gasoline-powered models, CNN reports.
Executives at Hertz, the largest car rental company by market share in the United States, say that while electric cars have lower maintenance costs, they cost more to repair and suffer more wear and tear.
“Repairs after collisions and damage can often cost twice as much, associated with some [situații] comparable to internal combustion engine cars,” explained Hertz CEO Stephen Scherr during a recent call with investors.
Added to this factor is the drop in EV prices, which has reduced the value at which Hertz can resell its used EVs.
“The reduction in maximum suggested retail prices during 2023, driven primarily by Tesla, has reduced the fair market value of our EVs compared to the prior year, so resale creates a greater loss and therefore a greater burden,” Scherr said. .
In other words, people are willing to pay a lower price for used EVs as new prices fall.
Most Hertz electric cars are made by Tesla
Hertz expects to lose about $245 million in depreciation on its electric vehicles, or $12,250 per vehicle, according to filings with the U.S. Securities and Exchange Commission.
About 80% of Hertz’s electric car fleet consists of Tesla models, and in total about 11% of the cars the company rents out are electric.
In addition to its leading position in the United States market, Hertz is also one of the largest car rental companies in the world, with presence in more than 160 countries in North America, Europe, Latin America, Africa, Asia, Australia, New Zealand, the Caribbean basin and the Middle East.
The company on Thursday announced the sale of thousands of electric vehicles from its fleet after a year in which Tesla aggressively cut the selling prices of the cars it makes amid growing competition from Chinese automakers and rivals. Europe and Japan.
In the last quarter of last year, Tesla surpassed the number of sales of electric cars worldwide for the first time, giving way to China’s BYD in this section.
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.