Why is Hertz Selling Its Electric Vehicles in the U.S.? Has the Future Ceased to Be Electric for Rent-a-Car Companies?

In 2021, Hertz in the U.S. announced that it would purchase a fleet of 100,000 units from Tesla . In 2024, it communicated that it would sell 20,000 electric vehicles. As a lot of misinformation is emerging around this topic, it seems important to explain the strategy behind this procedure. So, what are the reasons why Hertz is selling a part of its fleet of electric vehicles?

Price Trajectory of BEVs

The first reason lies in the current dynamics of the electric vehicle market. We are in an era where BEVs are becoming "mainstream," definitely entering the mass market. Most significantly, BEVs are moving towards price parity with combustion vehicles, making them increasingly accessible.

For rent-a-car companies, a very significant part of the business is in the residual value of the cars. That is, the value resulting from the sale of fleet vehicles after the time of stay in the fleet, which is generally 12 to 18 months.

Currently, the downward trajectory of BEV prices is occurring, more or less accelerated, depending on the markets. In certain countries and in this context, maintaining a fleet of electric vehicles may not be the most advisable strategy for a rent-a-car. Selling now, while prices have not yet reached the lower peak, seems to be a logical decision.

Maintenance and Repair Costs

In the U.S., Hertz chose to rent a significant part of its Tesla fleet to Ride-Sharing drivers who make super-intensive use of their vehicles, traveling an average of 300 km per day. In addition, these operators tend to continuously resort to fast charging, creating accelerated wear on the batteries. To add to all this, Tesla is an OEM with little experience in the Rent-a-Car market and not very available to make the discounts on maintenance and repairs that RAC companies are used to.

In this context, maintenance costs were another factor that led Hertz to want to sell part of its BEV fleet in the U.S.

Has the Future Ceased to Be Electric for Rent-a-Car Companies?

Most rented vehicles circulate in urban and suburban areas. Quieter, more agile, with no local emissions, and no circulation restrictions, BEVs are ideal for cities.

Even for Ride-Sharing drivers, BEVs are and will continue to be the best option. Much more economical in energy and maintenance costs than ICEs, BEVs used in Ride-Sharing will tendentially adopt LFP batteries, much more resistant to successive fast charges. However, it should be noted that many vehicles in Ride-Sharing are operated by only one driver and, therefore, can charge in slow charges during the rest period.

Price parity between BEVs and ICEs is already on its way in China and is expected to occur between 2026 and 2027 in Europe. At that time, depending on the country, RAC operators will return to acquiring fleets of electric vehicles.

The strategies of RAC companies differ depending on the market in which they operate, precisely because the factors that were at the base of the decision taken by Hertz in the U.S. do not have an equal impact in all markets.

For example, Hertz Portugal confirmed that it will maintain and reinforce its fleet of electric vehicles in Portugal, despite the decision of Hertz in the United States. Hertz Portugal, a franchisee of Hertz Corporation operated by the Autohellas Group Group, intends to continue expanding its fleet of electrified vehicles.

The future will tendentially be electric for all cars, including those that will be part of the fleets of Rent-a-Car companies.

Ricardo Oliveira

World Shopper | #GetReadyForTheFuture