Why Hertz Is Selling 20,000 EVs from Its Fleet

In a significant pivot that has sent shockwaves through the automotive industry, rental giant Hertz is selling off approximately 20,000 electric vehicles from its fleet. This represents about one-third of their global EV inventory. The decision marks a sharp reversal from their ambitious 2021 announcement to purchase 100,000 Teslas. For consumers, this move signals major changes in the rental market and creates unique opportunities for those looking to purchase a used electric vehicle at a bargain price.

The Financial Burden of Collision and Repairs

The primary driver behind this massive sell-off is the unexpectedly high cost of maintaining an electric fleet. Hertz CEO Stephen Scherr has been transparent about the financial reality: EVs have proven significantly more expensive to repair than traditional internal combustion engine (ICE) vehicles.

While EVs generally have fewer moving parts than gas cars (meaning no oil changes or transmission flushes), collision repairs are a different story. Rental cars are naturally prone to higher accident rates, and Hertz found that repairing damage on a Tesla costs roughly twice as much as a comparable gasoline vehicle.

Several factors contribute to these inflated costs:

  • Parts Availability: specialized Tesla parts often have long lead times, keeping cars out of the rental pool and earning zero revenue for weeks.
  • Labor Rates: Repairing high-voltage systems requires specialized labor, which commands a higher hourly rate than standard bodywork.
  • Structural Complexity: Many modern EVs use unibody casting. A minor fender bender that would be a simple fix on a Ford Altima might require a total structural replacement on a Tesla Model 3.

The Depreciation Trap

Hertz also fell victim to the volatile pricing strategy of Tesla itself. When Hertz initially placed its order, Tesla prices were at a peak. throughout 2023 and entering 2024, Tesla aggressively cut the prices of its new Model 3 and Model Y vehicles to maintain market share against competitors like BYD.

These price cuts had a cascading effect on the used car market. When the price of a new car drops by $10,000, the value of a used version of that same car plummets instantly. This rapid depreciation meant the asset value of Hertz’s fleet eroded much faster than anticipated.

This depreciation hit the company hard. In regulatory filings, Hertz disclosed it would take a non-cash charge of approximately $245 million related to the incremental net depreciation expense. By selling the cars now, Hertz is attempting to stop the bleeding before the vehicles lose even more value.

The Renter Experience Gap

Beyond the balance sheet, operational challenges played a major role. The average renter is not yet fully comfortable with the logistics of driving an electric vehicle. Hertz found that demand for EVs was softer than expected, particularly among business travelers who value speed and convenience above all else.

Common complaints from renters included:

  • Range Anxiety: Unfamiliarity with how far the car could go on a charge.
  • Charging Infrastructure: The difficulty of finding chargers in unfamiliar cities, coupled with the time required to charge, proved frustrating for customers on tight schedules.
  • Learning Curve: EVs often have different door handles, regenerative braking systems, and touchscreen controls that can confuse drivers who just want to get from the airport to their hotel.

Consequently, Hertz is reinvesting the capital from these sales back into gasoline-powered vehicles to meet the immediate demand of their customer base.

What This Means for Used EV Prices

Hertz’s decision to dump 20,000 units onto the used market has created a surplus that is driving prices down. This is excellent news for budget-conscious buyers. The influx of inventory forces other sellers to remain competitive, creating a buyer’s market for used EVs.

You can currently find 2021 and 2022 Tesla Model 3s on the Hertz Car Sales website for significantly less than the market average. Prices for some high-mileage standard range models have dropped as low as $20,000 to $25,000.

The Tax Credit Opportunity

A crucial detail for buyers is the price point. The IRS offers a used EV tax credit of up to $4,000 (or 30% of the sale price) for vehicles purchased for $25,000 or less.

  • Because Hertz is pricing many of these Teslas right at or below the $25,000 mark, they potentially qualify for this federal incentive.
  • This could bring the net cost of a used 2021 Tesla Model 3 down to around $21,000 for eligible buyers.

Should You Buy a Rental Tesla?

The prices are attractive, but buying a former rental car comes with risks. These vehicles have likely seen hundreds of different drivers, many of whom may have tested the limits of the car’s acceleration or treated the interior roughly.

Pros of Buying from Hertz:

  • Price: It is currently one of the cheapest ways to get into a modern Tesla.
  • No Haggle: Hertz uses a “no-haggle” pricing model, simplifying the purchase process.
  • Warranty: Most 2021 and 2022 models still have remaining factory warranty on the battery and drive unit (usually 8 years or 100,000 to 120,000 miles).

Cons to Consider:

  • High Mileage: Many of these cars have racked up 50,000 to 90,000 miles in a very short period.
  • Cosmetic Wear: Expect rim rash, paint chips, and interior wear consistent with heavy public use.
  • Repair History: Always check the vehicle history report for accidents, as Hertz self-insures and repairs might not always appear on standard Carfax reports in the same way insurance claims do.

Frequently Asked Questions

Is Hertz selling all of its electric vehicles? No. Hertz is selling about 20,000 EVs, which represents roughly one-third of its global electric fleet. They will still offer EVs for rent, but the fleet size will be more aligned with current customer demand.

Are the cars being sold only Teslas? While the majority of the headlines focus on Tesla due to the volume, Hertz is selling various EVs from its fleet including Polestars and Chevrolet Bolts. However, the Tesla Model 3 makes up the bulk of the sales inventory.

Where can I buy these used Hertz Teslas? These vehicles are listed directly on the Hertz Car Sales website. You can filter by make and model to see what is available in your region. They also allow for test drives through their “Rent-to-Buy” program in some areas.

Will Hertz buy EVs again in the future? Hertz has stated they remain committed to their electric strategy in the long term. However, the pace of adoption will be slower, and future purchases will likely depend on improvements in repair costs, vehicle pricing stability, and charging infrastructure growth.