Hertz is making waves in the rental car market by offering enticing discounts to customers currently renting electric vehicles (EVs), allowing them the opportunity to buy the vehicles they are using. This initiative comes amid significant changes in Hertz’s EV strategy, including plans to reduce its electric fleet by one-third.
Recently, Hertz (Hertz Global Holdings, Inc. – NASDAQ: HTZ) has reached out to renters of its electric vehicles with offers that have caught the attention of many. Reports from various renters on platforms like Reddit reveal that some have been presented with remarkable purchase options. For instance, one renter was offered a 2023 Chevy Bolt for $18,442, while another was given the chance to buy a 2023 Tesla Model 3 with just 30,000 miles for $17,913. Additionally, an offer for a Polestar 2 was made at $28,500. These deals are further sweetened by a limited 12-month, 12,000-mile powertrain warranty and a buy-back option within seven days of purchase.
This move comes as Hertz prepares to sell off approximately 20,000 EVs from its fleet, which accounts for about one-third of its global electric vehicle inventory. The company cited lower demand and higher-than-expected repair costs as primary reasons for this decision. Hertz’s current EV fleet includes around 40,000 vehicles across various makes and models, with Teslas comprising about 80% of this total.
The decision to reduce the EV fleet aligns with Hertz’s goal to balance supply with customer demand while addressing the financial implications of maintaining a large number of electric vehicles. In the third quarter of 2023 alone, Hertz reported vehicle depreciation expenses totaling $937 million, a significant increase from the previous year. This depreciation is primarily attributed to the accelerated sell-off of newer EVs that were initially part of its ambitious electrification strategy.
Hertz’s pivot away from a larger EV fleet is also influenced by customer feedback regarding the challenges associated with renting electric vehicles. Many customers have expressed frustrations related to charging logistics and operating unfamiliar technology during their travels. In response to these concerns, Hertz plans to enhance its EV offerings by expanding charging infrastructure and improving customer education on electric vehicle usage.
Despite this reduction in its electric fleet, Hertz remains committed to offering EVs as part of its rental services. The company aims to improve the profitability of its remaining electric vehicles through strategic partnerships with manufacturers and ongoing investments in infrastructure.
Hertz’s current strategy reflects both an adaptation to market realities and an effort to provide value to customers interested in purchasing electric vehicles at competitive prices.
