The car rental company Hertz ordered a good 100,000 Teslas in 2021 – now a fifth is to be sold. picture alliance / NurPhoto | Beata Zawrzel
Share prices of Hertz and Tesla fell on Thursday after the car rental company backed away from its electric car push.
Hertz said it will sell about 20,000 electric vehicles and buy more internal combustion engine cars.
Hertz ordered a total of 100,000 Teslas for its fleet in 2021, but recently saw demand decline.
Shares of Tesla and Hertz plunged on Thursday after the car rental company said it would sell about a third of its electric vehicle fleet. Citing weak demand for electric cars, Hertz said in a regulatory filing that it would use proceeds from the sale of 20,000 electric vehicles to buy internal combustion engine cars.
Tesla shares fell by almost three percent, while Hertz Global Holdings fell by 4.28 percent.
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The announcement represents a significant about-face for Hertz, which previously set a goal of electrifying a quarter of its entire fleet by this year.
The company plans to continue offering electric vehicles, but will focus on matching supply with demand. Meanwhile, Hertz has struggled with higher repair costs for its electric vehicles, and Tesla’s price cuts have reduced the value of its fleet.
Hertz will record additional net depreciation and amortization expense of $254 million (€232 million) as a result of the sale, and the sale is expected to be completed by 2025.
In 2021, the company ordered 100,000 Teslas, reaffirming its lofty bet on electrification. At the time, this was the largest single purchase of electric cars.
Alongside companies like Amazon, Best Buy and DHL, Hertz was part of an agreement with the Corporate Electric Vehicle Alliancewhich aimed to purchase at least 330,000 electric vehicles by 2027.
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For its part, Tesla just updated its Model 3 for the first time in years and recently started delivering its Cybertruck. However, Chinese automaker BYD recently overtook Tesla as the world‘s largest seller of electric vehicles.
This article has been translated from English. You can find the original here.