Rental car giant Hertz made a big splash a couple of years ago when it agreed to add 100,000 Teslas to its rental fleet. However, the company’s rethinking that plan and is even selling off as many as 20,000 of those Teslas it purchased.
Hertz is backtracking from its plans to buy 100,000 Teslas for its rental fleet.
What caused the big change in plans? Well, it may be best summed up in the phrase we’ve all heard before: People will do things in rental cars they wouldn’t dream of doing in their own vehicles. To that end, it’s made keeping the Teslas in the fleet up and running more expensive than initially expected.
Hertz plans to shift back to more gas-powered vehicles, it said Thursday, citing higher expenses related to collision and damage for EVs even though it had aimed to convert 25% of its fleet to electric by the end of this year. The company not only inked a deal to buy 100K Teslas, but it also made a deal for 65,000 Polestars as well.
The rental car company got a lot of attention for its deal with Tesla, even signing former Super Bowl-winning quarterback Tom Brady to advertise the availability to rent EVs. However, the higher-than-expected maintenance costs combined with the higher price to buy an EV made for a tough proposition for the company’s bottom line.
“Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter,” Hertz said in a regulatory filing on Thursday. It’s not getting out of the EV rental business entirely, officials noting their were looking for ways to make the vehicles more profitable.
Hertz even hired Super Bowl-winning quarterback Tom Brady hype the availability of EVs at Hertz.
Their loss is your gain
With all of the talk about how much the price of a new Tesla dropped in 2023 due to CEO Elon Musk’s repeated price cuts, the move by Hertz represents a new opportunity for someone looking to buy a used EV.
Hertz is selling some Tesla Model 3s for as low as about $20,000, nearly half the purchase price for the cheapest variant of the compact sedan, its used car website showed, according to Reuters. It lists more than 700 EVs on sale, including BMW’s i3, Chevrolet’s Bolt and Tesla’s Model 3 and Model Y SUVs.
While buying a new Tesla won’t get you the full $7,500 federal tax credit, buying a used Tesla may make you eligible for the $4,000 used EV credit. Also some states offer used EV credits as well so be sure to check with your state’s government to confirm eligibility.
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