​Hertz, the international car rental giant, has announced the abandonment of a third of its global electric fleet, which is 80% Tesla vehicles. Hertz will sell 20,000 electric and buy gas cars, citing higher-than-expected costs, especially when it comes to repairs after accidents.

In recent years, the car rental company has purchased tens of thousands of electric vehicles, most of them Tesla, as well as cars from Kia, General Motors, Volkswagen and Polestar.

One of the reasons for abandoning these cars is that the average selling price of new electric cars has fallen by 25-30%, so the ones in Hertz’s fleet have also depreciated greatly. According to the company, depreciation averages more than $12,000/car, with a total of $245 million lost in resale.

Essentially, the rental car company calculated when it bought new EVs how much it could get by selling them, and now estimates point to much lower prices. For the past two years, Tesla Motors has been running an aggressive campaign to lower the prices of new cars, so other competing companies have decided to do the same in order not to lose customers.

The drop in new car prices has also had an impact on used car prices. Electricity is greatly depreciated, especially since any buyer of, for example, a 5-6-year-old electric car will wonder what condition the battery is in and how much the range has decreased.

Another problem is higher-than-expected repair costs after crashes, because a significant portion of all-electric rental customers have not driven such cars, which have very good acceleration but are heavier. In general, electric cars get into more accidents than gasoline cars.

One area where average costs are lower than for gasoline cars is maintenance costs.

Hertz’s ad has led EV skeptics to say it’s evidence of over-hyped cars that critics say aren’t popular with the public.

Sources: Motor Trend, New York Times, CNN

Photo source: Dreamstime.com