Hertz Is Selling 20,000 EVs Due to Lack of Customer Demand

 Note to rental car agencies and auto manufacturers: Don’t do foolish things.

After Big Tesla Bet, Hertz Selling One-Third of EV Fleet

Hertz is selling a third of its EVs globally, with 20,000 in the US and will use some of the money to buy more Internal Combustion Engine (ICE) gasoline-powered cars.

Please consider After Big Tesla Bet, Hertz Selling One-Third of EV Fleet

Hertz said Thursday that it would sell about 20,000 EVs in the U.S., and use some of the proceeds to purchase internal-combustion-engine vehicles. The company in a regulatory filing cited weaker demand for electrics, and their higher operating costs.

The move is the latest example of a swift retrenchment by the car business on EVs. After years spent outlining aggressive expansion plans, automakers in recent months have put some EV projects on ice and dialed back production forecasts, citing signs that U.S. consumers aren’t ready to move to cars powered exclusively by batteries as quickly as once thought.

The car industry’s effort to sell consumers more broadly on EVs has run into some resistance lately as automakers have largely exhausted the pool of early adopters who tend to be willing to take a chance on new technology.

The company said it would log a $245 million incremental net depreciation expense related to the sale of the 20,000 electric vehicles. Hertz sells its used rental vehicles directly on its website.

Hertz Was Foolish

• The infrastructure was not in place.
• There is only a small pool of people familiar with the nuances of EVs, especially braking.
• No one in their right mind would want to figure out where and how to charge an EV on the road, in an unfamiliar location.

So, why the rush?

Hertz wanted 25 percent of its fleet to be EVs by the end of the year. That just went out the window.

Front-End Collision Hoot of the Day

Reuters noted “Hertz even limited the torque and speed on the EVs and offered it to experienced users on the platform to make them easier to adapt after certain users had front-end collisions.“

Hertz has to limit the speed to prevent crashes. What a hoot.

EV Expectations

Morgan Stanley analyst Adam Jonas said in a note Hertz’s move was another sign that EV expectations need to be “reset downward”.

While consumers enjoy the driving experience and fuel savings (per mile) of an EV, Jonas said there are other “hidden costs to EV ownership“.

“Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter,” Hertz said in a regulatory filing on Thursday.

The company, which had earlier planned to order 100,000 Tesla vehicles by 2022 end and 65,000 units from Polestar over five years, said it would focus on improving profitability for the rest of its EV fleet.

Switched From Hertz

Hertz Deals

Want a used Tesla? You can find them at Hertz Car Sales.

Hertz is selling some Tesla Model 3 for as low as about $20,000, about half the purchase price for the cheapest variant of the compact sedan.

Despite Huge Incentives, Supply of EVs on Dealer Lots Soars to 92 Days

On July 13, 2023, I noted Despite Huge Incentives, Supply of EVs on Dealer Lots Soars to 92 Days

EV inventory is piling up on dealer lots. Hello car manufacturers, what are you going to do with all that inventory?

Firm Answer to My July 13 Question

• October 24, 2023: GM Scraps EV Target, Ford Scales Back Electric Trucks, Musk Warns of Challenges
• To Shore Up Share Price, GM Decreases EV Investment in Favor of Buybacks

Wake Up Mr. President, Consumers Don’t Want EVs

On October 16, 2023 I commented Wake Up Mr. President, Consumers Want Hybrids, Not EVs

In retrospect, a better titled would have been “consumers don’t want EVs”

Well, Biden learned nothing. But it seems GM, Ford, and Hertz sure did.

https://mishtalk.com/economics/hertz-is-selling-20000-evs-due-to-lack-of-customer-demand/