Hertz to sell off fleet of 20,000 EVs, revert to gas-powered cars

On Thursday, Hertz announced that it had begun selling off one third of its electric vehicles with the goal of filling the space in its fleet with gas-powered cars.

The rental car company said the sale kicked off last month, and will be ongoing until the end of 2024. 

"We took a bold move and are taking a strategic adjustment to our fleet to take 20,000 electric vehicles out of the fleet," Hertz CEO Stephen Scherr said in an interview with CNBC. "It's really to respond to the reality, which is we're trying to bring supply in line with demand and we're addressing a cost issue that happens to be related to the EVs in the context of damage and damage costs."

Scherr emphasized that the decision was "not about the broader issue of EVs for the company," rather, "it's about financial performance and operational integrity."

He lamented the fact that while interest in EVs was present, it "isn't happening at a level of demand that justifies us maintaining a fleet of this size at this moment in time."

"We may have been ahead of ourselves in the context of how quickly that will happen," Scherr continued, suggesting that EVs will nonetheless one day be "the best rental car."

According to Bloomberg, in 2021 Hertz announced plans to buy 100,000 Teslas, and recently signed agreements with General Motors and Polestar to purchase an additional 175,000 and 65,000 EVs, respectively. In light of the recent move, Scherr admitted it will take longer than anticipated to complete those deals.

While EVs have been touted as the cars of the future, Scherr noted that current models bring with them higher repair costs that impact the company's bottom line. At the time the sale was announced, EVs made up 11 percent of the fleet, with Teslas making up 80 percent of that figure.