The about-face, after Hertz said it would buy 100,000 Tesla cars, underscores the waning demand for all-electric cars.
Hertz Global Holdings plans to sell a third of its US electric vehicle fleet and reinvest in gas-powered cars due to weak demand and high repair costs for its battery-powered options.
The sales of 20,000 EVs began last month and will continue over the course of 2024, the rental giant said Thursday in a regulatory filing. Hertz will record a non-cash charge in its fourth-quarter results of about $245 million related to incremental net depreciation expense.
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The dramatic about-face, after Hertz announced plans in 2021 to buy 100,000 Tesla Inc. vehicles, underscores the waning demand for all-electric cars in the US. EV sales growth slowed sharply over the course of 2023, rising just 1.3% in the final quarter as consumers were put off by high costs and interest rates.
“The elevated costs associated with EVs persisted,” Hertz Chief Executive Officer Stephen Scherr said in an interview. “Efforts to wrestle it down proved to be more challenging.”
Going forward, Hertz will keep a close eye on EV demand both at dealerships and within its own operations to decide whether the company should buy more vehicles, Scherr said. That means its agreement to buy 175,000 EVs from General Motors Co.
