Hertz Is Unloading Hundreds of Teslas for Cheap

And they're gonna use the money to buy more gas guzzlers.

Tesla La Land

As it turns out, owning a fleet of electric cars for rental might cost more money than its worth. To offset the costs, Hertz is set to offload 20,000 of its used EVs, including a bunch of Teslas, for way less than it paid for them.

As Bloomberg reports, this move comes as a pretty big surprise because less than three years ago, Hertz announced that it was planning to buy 100,000 Teslas.

As of press time, Hertz had about 684 EVs for sale, roughly 640 of which are Teslas ranging in price from $20,125 to $40,886.

Although many of those figures represent sizable markdowns from the cost of a brand-new 2024 Tesla Model 3 — which is valued at about $38,000 per the MSRP — Business Insider pointed out that buying a used EV is a risky choice for a number of reasons, including the cost of repairs and battery aging.

In an interview with the website, Hertz CEO Stephen Scherr echoed similar sentiments, explaining that the rental agency decided to sell tens of thousands of its EV fleet throughout 2024 because "the elevated costs associated with EVs [has] persisted."

He's not wrong there: as research commissioned by the EV repair firm Solera Holdings revealed a few months ago, it's still significantly more expensive to repair an electric car than one of its gas-based counterparts. Multiply that by 20,000 and the financial aspect of the decision becomes clear.

Gassed Out

In a filing viewed by Bloomberg, Hertz admitted that it may use some of the money raised from the sale of its EVs to reinvest in conventional gas guzzlers, which are worse for the planet but much better, it seems, for the company's bottom line.

"The company expects this action to better balance supply against expected demand of EVs," the filing read.

Reading between the lines, Bloomberg's analysts suggested that despite the splashy Tom Brady-assisted campaign used to announce the Tesla buy, Hertz may have discovered that in the rental market, at least, people simply may not want electrics as much as the conventional gas-powered cars they're used to.

That said, the rental agency is eyeing GM's plan to start selling cheaper EVs — which is back to the drawing table after the company and Honda kiboshed it in fall 2023 — in an effort to make renting out electric cars profitable.

"We’re committed to the strategy" Scherr, the CEO, said. "It will take more time to execute it."

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