Hertz to sell off EV fleet in shock U-turn after Tom Brady ad blitz, will re-focus on gas-powered cars

Rental giant Hertz on Thursday said it will sell off about 20ཧ,000 electric vehicles from its fleet and buy more gas-powered cars – a stunning reversal after tapping NFL legend Tom Brady to tout it🔯s transition to EVs.

The company said the high costs to❀ repair electric vehicles and a lack of demand among renters led to its ಌdecision to abandon those plans.

Brady starred in a series of buzzy Hertz commercials in 2021, with Hertz vowing it would order 100,000 Tesla vehicles by the end of 2022 — before Thursday’s sudden U-turn.

“The company expects this action to better balance supply against expected demand of EVs,” Hertz said in a꧒ regulatory filing announcing the move.

“This will position the company to eliminate a disproportionate numbe😼r of lower margin rentals and reduce damage expense associated with EVs.”

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H🌠ertz said it expects to complete sales of its electric veh💦icles by 2025.

The company’s shares plunged more than 4% in tra🗹ding Thursday. Tesla shares fell about 3%.

The Tesla deal was just one element of Hertz’s plan to “electrify” its rental fleet. The company previouꦬsly said in 2022 that it would buy 1💝75,000 EVs from General Motors and as many as 65,000 electric vehicles from Swedish manufacturer Polestar.

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The rental service expect𒁃s to incur about $245 million in “incremental net depreciation expense” related to the move, according to the filing. Those costs will be 🎃reflected in the fourth fiscal quarter of 2023.

The cost of maintaining a fleet of electric vehicles has been a source of concern for Hertz executives.
Last October, Hertz CEO Stephen Scherr to🧔ld analysts that “collision and damage repairs on an EV can often run about twice that associated with a compa🌸rable combustion engine vehicle.”

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Scherr insisted at the time that Hertz was “committed” to a “long-term strategy to electrify the fleet.”
Hertz’s used car website lists more than 700 EVs on sale including BMW’s i3, Chevrolet’s🍸 Bolt and Tesla’s Model 3 and Mod💃el Y SUVs.