Rental firm Hertz Global Holdings (HTZ.O) said on Thursday it would sell about 20,000 electric vehicles, including Teslas, from its U.S. fleet due to higher expenses related to collision and damage, and will opt for gas-powered vehicles.
Shares of the company, which also operates vehicles from Swedish EV maker Polestar among others, fell about 4%. Tesla’s (TSLA.O) stock was down about 3%.
Hertz also expects to book an about $245 million charge related to depreciation expenses from the proposed EV sale in the fourth quarter of 2023.
Hertz’s decision underscores the bumpy road EVs have hit as the growth rate on sales of those vehicles has slowed, causing carmakers like General Motors (GM.N) and Ford (F.N) to scale back production plans of those vehicles.
Morgan Stanley analyst Adam Jonas in a note said the car rental firm’s move was a warning across the EV space and it was another sign that EV expectations need to be “reset downward across the market.”
“While consumers enjoy the driving experience and fuel savings (per mile) of an EV, there are other ‘hidden’ costs to EV ownership,” Jonas added.
The thing I find interesting is that these vehicles should be covered by insurance that would cover repairs after deductible.
I don’t understand why there would be any difference between EV and ICE in that regard.
Companies this size might self insure and do their own repairs. If parts cost 5x as much, the repair is going to cost more. Same as with a Toyota versus an Audi.
Yeah… I was thinking that self insuring would be the only possible way this could make sense really.
It just never occurred to me before that car rental companies might do that.