Rental Car Company Is Selling 20,000 EVs and Replacing Them with Gas-Powered Vehicles

By B.N. Frank

It was reported in November that electric vehicle (EV) sales were way down in the U.S. and that almost 4000 car dealers had asked the Biden administration to slow their rollout. Also in November, Consumer Reports published an article about EVs not being reliable (perhaps for those who didn’t already know). Additionally, since 2022 there have been numerous reports about how EV charging threatens power grids (see 1, 2, 3, 4, 5) and medical implants. Of course, everybody must know by now that EVs are also notorious for fires – some that have happened while they were being charged (see 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15). In fact, EVs that have been flooded have also been spontaneously combusting (see 1, 2)! Nevertheless, the Biden administration is still allocating boatloads of money for EV charging stations though as of last month none had yet been built. In the meantime, Hertz is selling 20,000 of their EVs for anyone interested in buying them.

From Ars Technica:

Hertz is selling 20,000 used EVs due to high repair costs

The rental car company will replace them with gasoline-powered vehicles.

Jonathan M. Gitlin

If you’re looking for an electric car bargain and you’re braver than the average bear, you might want to check out Hertz, the car rental agency. After announcing big plans to purchase tens of thousands of EVs from Tesla and then Polestar, it’s now liquidating a third of that fleet, the company told investors.

After Hertz went bankrupt during the early days of the pandemic, its big EV ambitions began in 2021, when the company revealed it wanted more than 20 percent of its rental fleet to be electric by 2022. To that end, it placed an order for 100,000 Tesla Model 3 sedans, then followed up with an order for 65,000 Polestar 2s.

By early 2023, it was still far short of the ambitious goal, in large part due to Tesla’s inability to actually fill that order in time, and EVs still represent just 11 percent of the total Hertz rental fleet. In total, the Hertz EV fleet is around 60,000 vehicles. But it may not actually be that upset at falling short—it turns out that the electric rental cars haven’t been the panacea it needed.

At the end of Q3 2023, Hertz told investors that significant price cutting during the year had “resulted in lower EV residual values, increasing vehicle depreciation expense and negatively impacting salvage cost.” Additionally, its rental EVs were damaged or crashed more often, and the much higher cost of repairs for Tesla vehicles—on average about 20 percent higher than other EVs—has meant that Hertz’s Teslas earn it less money per vehicle than its other rentals.

Consequently, it’s selling off 20,000 EVs over the course of this year. Currently, the company has over 700 EVs for sale, including 35 Chevrolet Bolts, four Kia EV6s, a single BMW i3 and Nissan Leaf, and then 673 Teslas—552 Model 3s and another 121 Model Ys.

Some of the used EVs are rather affordable—the cheapest Model 3 is just $20,125. A long-range Model Y will cost a fair bit more than that, although even here, the most expensive one for sale by Hertz is just $38,116. As a reminder, there is now a tax credit of up to $4,000 available when buying a used EV that costs less than $25,000, assuming one meets the income caps.

But they are all ex-rental cars, and that means most of these cars have had relatively hard lives and now have plenty of miles on them—the cheaper Model 3s are all closing in on 100,000 miles. Not all of them, though—in New Orleans, there’s a Kia EV6 up for sale with just under 5,000 miles.

Hertz says depreciation of $245 million for its EV assets will show up in the Q4 2023 financial results. The company plans to use some of the proceeds of the sale to purchase more gasoline-powered rental cars.

Jonathan is the Automotive Editor at Ars Technica. He has a BSc and PhD in Pharmacology and followed up with postdoctoral work at The Scripps Research Institute in La Jolla, CA, and the University of Kentucky in Lexington, KY, then moved to the National Human Genome Research Institute at the National Institutes of Health as a science policy analyst. In 2004 he started contributing to Ars Technica, covering the sciences with the occasional foray into racing games and motorsport. In 2014 he decided to indulge his lifelong passion for the car by leaving NHGRI and launching Ars Technica’s automotive coverage. He lives in Washington, DC. Instagram: https://www.instagram.com/drgitlin/

A less reported issue about EVs – they also expose drivers and passengers to biologically harmful electromagnetic radiation (see 1, 2, 3, 4, 5, 6, 7, 8)!

Nevertheless, none of the above has stopped efforts to push EVs in the U.S. as well as install technology that allows EVs to be wirelessly charged while they are being driven on American roads (see 1, 2). E-gads!