RENTAL car giant Hertz, has announced that it is selling off 10,000 more EVs than it planned in January when it set out to stem the tide of massive depreciation that hit its fleet of 60,000 EVs. 

The latest move takes the total number it is quitting at this stage to 30,000 after experiencing losses of $A600 million in three months.

This latest cleanout leaves the company with 30,000 Tesla EVs that remain a continued threat to the company’s bottom line. Hertz has been hit by massive depreciation on the EVs it owns in the wake of heavy Tesla discounting as well as higher than expected repair and write-off costs that EVs experience over ICE vehicles. 

Hertz said that while everyone thought that EVs would be cheaper to repair it turns out that, for Hertz, repairing EVs is twice the cost of repairing ICE vehicles.

Until January, Hertz was in the process of fulfilling a commitment made in 2021 to buy 100,000 Teslas for its rental fleet (for which it was praised by the White House) but the program came under stress when Tesla began discounting its cars last year. 

This set off a tsunami of depreciation for existing Tesla owners; including Hertz, which had the biggest exposure of anyone. In turn, other EV makers followed suit with discounts and retained values for all EVs became a race to the bottom.

When announcing the intention to drop 20,000 EVs in January, Hertz said that its EV fleet had cost it $US245 million ($A375 million) in unexpected depreciation and that led to an overall corporate loss of $US392 million ($A600 million) in just three months.  

Its shares have dropped from $US19 per share to $US10.68 per share in the past year. They were selling for as high as $US46 in 2022 before the impact of the EV costs began hitting the bottom line.

The rental company’s market capitalisation has fallen from $US11.57 billion ($A17 billion), when it began its EV purchase program with Tesla in 2021, to just $US1.44 billion ($A2.21 billion) today.

Hertz has since put on hold an agreement to buy EVs from Volvo associate Polestar.  

Meanwhile, there is no word as yet on the fate of a deal for Hertz to supply Tesla’s to Uber drivers; also announced in the headier days of 2021. At that time Hertz it said would supply Uber drivers with 50,000 Tesla’s and was even talking of ultimately lifting the number to 150,000 cars. 

Footnote: It was recently reported that Edmunds.com, an American online automotive information website which features car reviews based on testing at the company’s private facility, bought a Fisker Ocean for its long-term testing fleet for $US69,000 ($A106,000). 

Two months later, with just 4220 miles on the clock, it was taken to CarMax, America’s largest used car superstore operator, for a valuation for an article. CarMax valued the Ocean at $US21,000 ($A32,000)  which is 70 per cent of lost value in two months.

Edmunds calculated that the Fisker had achieved five years of depreciation in just eight weeks. Is this a record?