Photo: Hertz | Edited
Hertz appeared as the biggest Tesla customer in October 2021 when it announced plans to buy 100,000 EVs from the market leader. Two and a half years later, Hertz's love affair with electric vehicles appears to wane, with very few electric cars added to its fleet in the first quarter.
Hertz boasted about transitioning its massive car rental fleet to electric vehicles, with plans to buy 100,000 Teslas by the end of 2022. The rental juggernaut also signaled an intention to purchase EVs from GM (175,000 cars) and Polestar (65,000 units), totaling 340,000 EVs. Considering Hertz currently has around 505,000 vehicles in its international fleet, the three agreements would have covered the electrification of 67% of its fleet. The plans were ambitious, but the end of 2022 showed that Hertz barely reached 48,000 electric vehicles in its fleet, most of them being Tesla.
One quarter later, Hertz announced during the Q1 2023 earnings call that its EV fleet comprises 50,000 cars, which means it bought very few electric vehicles during the quarter. The electrification process also seems to lose steam, considering that the EV percentage dropped from 11% of the fleet in Q4 2022 to 10% in Q1 2023. However, Hertz's overall fleet has become larger, which means the car rental company has bought more ICE vehicles instead of EVs.
Despite the obvious, Hertz CEO Stephen Scherr said that the company's electrification strategy helped it achieve better-than-expected results in the first quarter. Hertz generated $2 billion in revenue, up 13% year-over-year. Scherr is luring investors with investments in technology and electrification, crediting the good results on this initiative. Although the EV fleet has not changed much, Scherr revealed that Hertz has begun taking deliveries of new EVs from GM and other carmakers.
We're unsure what prompted this stagnation, especially as Tesla cut the prices significantly starting in January. Not only that, but the EV maker no longer has a production problem and is struggling to increase demand. Buying tens of thousands of Teslas at this time would've been a no-brainer for Hertz had it wanted to add all those electric vehicles to its fleet. The Model 3 is at its lowest price in years, and the Model Y is finally becoming affordable. Scherr did say that Hertz profited from the recent price cuts, but this hardly reflected in the number of EVs in its fleet.
One of the reasons could be that customers don't want to rent electric vehicles. In January, we discovered that many unrented Teslas were filling the parking lots, despite Hertz offering better rates on them. Stories on social media show that customers are not used to driving electric vehicles, and Hertz does nothing to educate them. The company handed them the cars with depleted batteries and didn't tell customers how outside temperature and driving style affects range. Because of that, most of them end up disappointed, adding to the urban legend that EVs are inferior to gas-powered cars.
One quarter later, Hertz announced during the Q1 2023 earnings call that its EV fleet comprises 50,000 cars, which means it bought very few electric vehicles during the quarter. The electrification process also seems to lose steam, considering that the EV percentage dropped from 11% of the fleet in Q4 2022 to 10% in Q1 2023. However, Hertz's overall fleet has become larger, which means the car rental company has bought more ICE vehicles instead of EVs.
Despite the obvious, Hertz CEO Stephen Scherr said that the company's electrification strategy helped it achieve better-than-expected results in the first quarter. Hertz generated $2 billion in revenue, up 13% year-over-year. Scherr is luring investors with investments in technology and electrification, crediting the good results on this initiative. Although the EV fleet has not changed much, Scherr revealed that Hertz has begun taking deliveries of new EVs from GM and other carmakers.
We're unsure what prompted this stagnation, especially as Tesla cut the prices significantly starting in January. Not only that, but the EV maker no longer has a production problem and is struggling to increase demand. Buying tens of thousands of Teslas at this time would've been a no-brainer for Hertz had it wanted to add all those electric vehicles to its fleet. The Model 3 is at its lowest price in years, and the Model Y is finally becoming affordable. Scherr did say that Hertz profited from the recent price cuts, but this hardly reflected in the number of EVs in its fleet.
One of the reasons could be that customers don't want to rent electric vehicles. In January, we discovered that many unrented Teslas were filling the parking lots, despite Hertz offering better rates on them. Stories on social media show that customers are not used to driving electric vehicles, and Hertz does nothing to educate them. The company handed them the cars with depleted batteries and didn't tell customers how outside temperature and driving style affects range. Because of that, most of them end up disappointed, adding to the urban legend that EVs are inferior to gas-powered cars.
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