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- Hertz plans to sell off 20,000 electric vehicles from its rental fleet.
- The company said the cars repair costs were a factor in its decision.
- Rental companies still need to update their processes for EVs, one reporter found.
Hertz is selling a massive chunk of its electric-vehicle fleet, it said Thursday, citing higher repair costs.
The company plans to sell 20,000 cars, or about one-third of its electric fleet, which includes Teslas, Chevrolet Bolts, Volvos, and more. Many are already up for sale online — some at a steep discount, as is usual when rental firms dispose of vehicles.
In a filing on the decision, Hertz said repair costs were a factor in its decision.
"While direct operating expenses per transaction day, excluding collision and damage, will be flat for the quarter and down for the year, expenses related to collision and damage, primarily associated with EVs, remained high in the quarter, thereby supporting the Company's decision to initiate the material reduction in the EV fleet," the company said.
Hertz said the reduction would help its earnings for 2024, but shares nosedived by as much as 6% in premarket trading Thursday following the announcement.
The car rental giant made a splash with its EV announcement in 2021, with grand plans to help EVs go mainstream. "It's a combination of data and also mindset," CEO Mark Fields said at the time.
But the auto market has changed dramatically in the years since, as a pool of EV early adopters dries up, leaving consumers (hit hard by skyrocketing interest rates) stuck with just a few expensive models to choose from and virtually no used market as an alternative.
Even at Hertz, the integration of EVs appeared to be rocky at times. In October, Hertz was already warning of higher repair costs.
And in December, a Business Insider reporter learned the hard way that rental processes for EVs were lacking.