Back in October 2021, rental car giant Hertz announced that former Ford CEO Mark Fields would be taking over as its interim CEO, and one of his first moves was to acquire 100,000 Tesla EVs and add them to the company’s fleet. At that time, this move was broadly celebrated – even praised by now-Ford CEO Jim Farley – and it was also part of a massive marketing effort led by former NFL great Tom Brady. However, it seems as if Hertz’s push toward electrification didn’t exactly go to plan, as the company is now selling off a third of its all-electric fleet and reinvesting in ICE models amid slow demand, according to Bloomberg.
Hertz is selling off a total of 20,000 EVs through the course of 2024, and it expects to record a non-cash charge in its fourth-quarter results of $245 million related to incremental net depreciation expense as a result. Back in October, Hertz Chief Executive Stephen Scherr announced that the company planned to scale back on its EV ambitions after rentals for those models accounted for just 11 percent of its total, with Tesla models making up 80 percent of that mix.
“The company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles to meet customer demand,” Hertz said in a statement. “The company expects this action to better balance supply against expected demand of EVs.”
This move mimics that of several automakers over the past few months as demand for EVs has recently stalled out a bit, though sales continue to increase at a rapid rate. In fact, Ford recently announced that it was dialing back its own electric ambitions somewhat amid this weakened demand, downsizing a pair of under-construction EV battery production plants at the same time.