Hertz Offers Steep Discounts to Renters Interested in Buying Their EVs

Hertz is selling its battery electric vehicles (BEVs) at steep discounts to interested renters. The car rental giant began the sale in November and is set to offload at least a third of its electric vehicle fleet. According to a 2023 statement from Hertz, lower demand for electric vehicle rentals coupled with high maintenance costs informed the renter’s decision to minimize its massive fleet of electric vehicles.

Recent reports have stated that renters who are currently renting a Hertz EV can snag these cars at massive discounts. Hertz is reportedly reaching out to these customers and inquiring if they would like to buy their current EV rentals instead of returning them. Some of the offers shared on social media include $18,442 for a 2023 Chevy Bolt, $17,913 for a Tesla Model 3 with just 30,000 miles, and $28,500 for a Polestar 2.

Hertz invested billions of dollars into electrifying its fleet, but announced in 2023 that it would be selling off a portion of its electric vehicles. With Hertz spending more than it had anticipated on EV repairs amidst low demand for EV rentals, the car rental firm decided to sell 30% of its EV fleet and buy internal combustion engine (ICE) vehicles with some of the proceeds.

This wouldn’t be the first time Hertz has reached out to its renters to see if they are interested in buying and has done so for ICE vehicles in the past. The current electric vehicle discounts are especially attractive as they could enable EV ownership for renters who couldn’t have purchased an electric vehicle outright.

Hertz’s initial decision to invest in electric vehicles was notable for its scale. The car rental giant announced in 2022 that it would buy 100,000 electric cars from Tesla, with an additional deal for 175,000 electric cars from General Motors and 65,000 units from Polestar over 5 years. Hertz’s bet on electric cars didn’t pay off and the company began its EV purge just a year later.

With Tesla cutting prices amidst a price discount war in China and automakers in the West following suit, the resale value of Hertz’s relatively new EV fleet, which mostly comprised Teslas, suffered a notable drop. The renter reported $937 million in vehicle depreciation losses in the third quarter, the depreciation per unit increasing from $537 in Q3 2023. Hertz expects depreciation per EV unit to normalize at below $300 by late 2025.

While this step taken by Hertz to scale down their EV fleet may be disappointing to manufacturers like Mullen Automotive Inc. (NASDAQ: MULN), other market segments, such as light commercial EVs, are seeing sales growth and EV makers will look to leverage these segments as motorists gradually increase their uptake of BEVs.

NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN

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