Why Hertz Is Selling 20,000 Electric Vehicles and Likely Switching to Gas-Powered Cars

Despite some skepticism, Hertz's decision to sell 20,000 electric vehicles (EVs) and opt for gas-powered cars is driven by a clear and rational business strategy. This decision isn't about ignoring warning lights or expecting free charging; it's about optimizing operational efficiency and meeting customer demands.

The Challenges of EV Charging

One common misconception is that Hertz hasn't altered their business model to accommodate electric vehicles due to the inconvenience of EV charging times. Unlike with internal combustion engine (ICE) vehicles, you can't simply fill up a gas tank and drive away. Charging an EV requires specific procedures and often more time than filling up an ICE vehicle. For daily commute rentals, this can be a significant drawback.

Operational Efficiency and Business Sense

Hertz, like other luxury rental car companies, has already adapted to the slower charging times. This adaptation has allowed them to maximize the utilization of their EV fleet. Moreover, EVs typically require less maintenance compared to ICE vehicles, resulting in cost savings and increased operational efficiency.

Misunderstandings and Market Realities

Many people's responses reference Tesla almost exclusively, which is understandable given Tesla's significant market presence. However, many of these responses come from individuals who have never rented a car, EV or ICE. It's crucial to recognize that the primary reason Hertz is selling 20,000 EVs is a straightforward business decision. People simply don't want to rent them.

This move is significant for both Hertz and the EV manufacturers. By selling off their EV fleet, Hertz may see an influx of competing EVs on the market. This could potentially disrupt the market dynamics and affect EV manufacturers' sales and market share.

Customer Preferences and Rental Business Models

Hertz, like many other companies, has a well-established business model of selling cars after they have been used for approximately two years. Their current fleet of 100,000 EVs, which began delivery in 2021, means that they are now at the two-year mark. Consequently, they are selling 20,000 of these vehicles.

It's worth noting that this is not unprecedented. In the past, Hertz has also sold off entire fleets, such as their fleet of Chrysler 300s. This decision to sell off EVs is part of a broader strategy to adapt to changing market demands and operational efficiencies.

Conclusion

Ultimately, Hertz's decision to sell 20,000 EVs and switch to gas-powered cars is a logical business move. While some may criticize the logic behind this decision, it is driven by a clear understanding of what works best for their rental business model and customer preferences. Moving forward, this decision will have significant implications for both the rental car industry and the broader electric vehicle market.