Hertz knocks down prices of its used Tesla fleet to new lows

Top line: Hertz is selling off its used EV fleet for an average price of $25,000 as it dials back its electrification plans.

Hertz has placed 20,000 EVs on sale, close to 33% of its total electrified fleet, with a litany of attractive incentives, including a 12-month/12,000-mile limited powertrain warranty, financing offers and vehicle protection plans.

Some of its listings qualify for the $4,000 used-EV tax credit as well, further sweetening the deal.

Why is Hertz desperate to sell off its EV supply?

• Used EV prices: Depreciation in the used EV market has been largely driven by Tesla, whose aggressive price cutting strategy has dragged preowned prices down 31.8% since March 2023. Comparatively, used vehicle prices, including ICE, have fallen only 3.6% since last year.

• Over-reliance on Tesla: While Hertz’s shopping spree in 2021 sourced inventory from a variety of brands, a majority of its fleet is comprised of 2022 and 2023 Model 3 sedans. These have seen some of the most significant price declines due to weakening demand for smaller vehicles.

• Falling share price: Hertz’s financial circumstances have worsened since 2021, due in part to its massive investment into EVs. Since the start of 2024, the company’s share price has collapsed 55%.

• Souring outlook: Near the end of May, Moody’s Ratings dropped the brand’s debt outlook from stable to negative, prompting the company to coordinate with financial advisors in an effort to raise capital.

Bottom line: Hertz’s struggles encapsulate the wider automotive industry’s attitudes toward EVs, which went from excitement to disillusionment over the course of several years. However, while the rental company likely won’t make back the money it spent in 2021, it won’t find any shortage of buyers in the U.S. Thanks to depreciation, used EVs are some of the cheapest cars on the market today, making them top-sellers for deal-starved consumers.

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