Hertz, one of the largest rental car companies in the U.S., is dumping tens of thousands of electric vehicles from its fleet, citing low demand and high repair costs.
“The dramatic about-face, after Hertz announced plans in 2021 to buy 100,000 Tesla Inc. vehicles, underscores the waning demand for all-electric cars in the US,” Bloomberg News reported. “EV sales growth slowed sharply over the course of 2023, rising just 1.3% in the final quarter as consumers were put off by high costs and interest rates.”
U.S. consumers have had serious concerns about the electric vehicle market ranging from the price of the vehicles and the serious lack of charging stations throughout the U.S. to electric vehicles experiencing dramatic losses in their driving range during weather conditions that feature extreme cold or heat.
“The elevated costs associated with EVs persisted,” Hertz Chief Executive Officer Stephen Scherr said. “Efforts to wrestle it down proved to be more challenging.”
The company hopes that its decision to sell off 20,000+ electric vehicles better balances “supply against expected demand of EVs,” it said in a regulatory filing.
Morgan Stanley analysts said told Reuters that Hertz’s move should be a warning to the entire auto industry about the reality of the electric vehicle market, that they are not that popular and expectations for their growth need to be significantly reduced.
The news comes after nearly 4,000 auto dealers across the U.S. said in a letter to President Joe Biden late last year that his push to make two out of every three new cars sold by 2032 electric was highly unrealistic.
While there were good options for people wishing to buy electric vehicles, “the reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs [Battery Electric Vehicle] arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots.”
The dealerships said they’ve seen a drastic shift in demand for electric vehicles in just the last year and that they are arriving on their lots faster than they can be sold despite “deep price cuts, manufacturer incentives, and generous government incentives,” the letter said.
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“Mr. President, no government agency, no think tank, and no polling firm knows more about the automobile customer than us,” it continued. “Some customers are in the market for electric vehicles, and we are thrilled to sell them. But the majority of customers are simply not ready to make the change.”