“The scarcity of talent, which means that you can charge a premium, and I think people are going to take advantage of that for better or for worse,” he said as one of the reasons. He also noted a lack of willingness in the automotive aftermarket to get involved.
Furthermore, as EV prices decline in the new car market segment, the resale value of Hertz’s used EV rental cars is being pushed down.
“The MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that a salvage creates a larger loss and, therefore, greater burden,” Scherr said.
However, industry observers noted that Hertz selling off the EVs will give consumers another avenue to purchase an EV at a discounted rate.
In a Securities & Exchange Commission filing, Herz said it expects to take a $245 million loss due to depreciation on the EVs — an average of about $12,250 per vehicle.
Tesla makes up about 80 per cent of Hertz’s EV options, which total about 11 per cent of the company’s rental fleet.