Hertz sells 20,000 electric vehicles as drivers prefer gasoline

The company is expected to sell thousands of Tesla vehicles. Photo: Toru Hanai/Bloomberg

American car rental giant Hertz is selling off thousands of Tesla cars. as weak demand forces the company to replace 20,000 electric vehicles with petrol-powered ones.

Hertz said it would sell cars over the next year and expects to lose $245m (£193m) as it canceled plans. intends to significantly expand its fleet of electric vehicles.

The company sells a range of makes and models, but is expected to sell thousands of Teslas. There are already more than 600 examples for sale on the used cars website.

Three years ago, Hertz announced plans to buy 100,000 Tesla electric vehicles, raising Tesla's market value to more than $1 trillion.

However, Hertz said leasing electric vehicles has proven to be less profitable than traditional cars and vehicle repairs also cost more expensive.

Drivers still prefer cars with gasoline or diesel engines. Hertz said it will «reinvest a portion of revenues from sales of electric vehicles into the purchase of internal combustion engine vehicles to meet consumer demand.»

The sale, which is limited to the U.S. but represents about a third of the company's global electric vehicle fleet, comes after Hertz spent years positioning itself as a «pioneer» in the electric vehicle rental business.

In addition to agreeing to buy 100,000 vehicles Tesla has committed to buying 65,000 vehicles from Volvo's electric subsidiary Polestar and last year said a quarter of its fleet would be electric by the end of 2024.

Hertz has also committed to buying 65,000 vehicles from Volvo's electric subsidiary Polestar

However, deliveries to date are well below those headlines.

The company said decisions to sell thousands of vehicles are already being made.” to better balance supply and expected demand for electric vehicles» and that «this will allow the company to eliminate a disproportionate number of low-margin leases and reduce damage costs associated with electric vehicles.»

Hertz said investment in gasoline-powered vehicles would improve profitability. The company added that it hopes to make electric vehicle rentals more profitable in the future by expanding charging stations and improving access to repairs.

Motorists have complained about problems renting electric vehicles due to the number of different charging networks. , the fact that cars are often unsuitable for long trips, or, in some cases, because drivers receive cars with fully charged batteries.

Hertz CEO Stephen Scherr said last year that the sharp drop in costs used electric vehicles has also made them less profitable.

CarGurus data compiled by HSBC this week showed the value of the 10 most popular used electric vehicles fell by 28% in the US last year and by 20% in the UK.< /p>

Car rental companies are hit hard by falling used car prices as they routinely scrap their fleets by buying new cars and selling them within two years.

Hertz, which sells used cars directly on its website, was selling Tesla Model 3s for just $17,700 this week, less than half the $38,990 price of a new model. The vast majority of electric vehicles currently for sale are Tesla, although the company said the sale of 20,000 vehicles «will span multiple makes and models.»

Hertz shares fell nearly 5% in Wall trading Street.

Hertz shares fell nearly 5% in trading on Wall Street.

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The company has an ongoing partnership with Uber, which allows drivers to rent electric vehicles from Hertz , but claims that the way taxi drivers drive makes cars more likely to be damaged.

The company has reduced the number of cars available to Uber drivers, but claims this has led to a glut of electric vehicles available for regular drivers to rent.

Demand for electric cars in the UK remained unchanged last year. According to the Society of Motor Manufacturers and Traders. They accounted for 16.5% of all new car sales last year, down slightly from 16.6% in 2022.

This has led to calls from the industry to cut VAT on cars to boost demand.

This has led to calls from industry to cut VAT on cars to stimulate demand.

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