Hertz Finally Accepts Reality, Starts Selling Off 20,000 EVs from Its Fleet
Hertz is learning the hard way that Americans really, really don’t like it when companies or governments try to force something upon us.
According to a recent report from the Securities and Exchange Commission, the Hertz rental car company “has made the strategic decision to sell approximately 20,000 electric vehicles … from its U.S. fleet, or about one-third of the global EV fleet,” following a couple of years of acquiring an exorbitant number of EVs.
“The company expects this action to better balance supply against expected demand of EVs,” it explained in the SEC filing.
In the report, Hertz cited a number of reasons for the decision, but the primary considerations were that “expenses related to collision and damage, primarily associated with EVs, remained high in the quarter, thereby supporting the company’s decision to initiate the material reduction in the EV fleet.”
The website Engadget reported that, though the company enthusiastically purchased 100,000 cars from Tesla in 2021, with plans to buy up to 65,000 more EVs from Polestar over the next five years, 2023 saw Hertz backing off from that plan somewhat, reporting in October that they were slowing down the intense acquisition plans.
It’s only now that this SEC filing has come out, however, that the public got a taste of what “slowing down” actually means for Hertz.
It seems, from the words of Hertz and their CEO in particular, that having so many EVs among their rental fleet was turning into something of a money pit, at least when it came to repairs. When explaining Hertz’s downsizing plans, CEO Stephen said that EVs are “about twice in terms of damage cost repair than a conventional internal combustion engine vehicle.”
And, while EVs, and specifically Teslas, have their fair share of fans, the inevitable downsides of owning an electric car have become increasingly more obvious, the more popular they have become.
In numerous blue cities, attempts to electrify public transportation have run into plenty of roadblocks, including the battery depleting in cold weather and struggles to find usable or convenient chargers. In San Fransisco, an electric bus recently lost power trying to drive up a hill, rolling backward into nine cars at the bottom of the hill.
Further, the number of EVs companies have been acquiring or manufacturing is simply not commensurate to the demand. As dealerships in Ohio recently learned, many people are slow to adopt electric cars, citing the expense, the inevitable cold weather issues and lack of infrastructure to allow quick and convenient fueling of their EV.
The real question, however, is who at Hertz decided to jump in feet first to electrify their fleet without first testing them out, to avoid having to sell off one-third of the EVs in their fleet?
Americans as a rule tend to be skeptical of new technology, and rightly so. The first cars, as we would recognize them, were developed in the late 1800s, but it wasn’t until the early 1900s that Americans began buying cars in significant numbers.
The technology had improved and their manufacture became more efficient, thereby reducing the cost, which is what finally convinced most Americans that the investment was worthwhile.
We want to be able to observe the pros and cons of a new technology, and have time to test it out before we decide to adopt it.
If companies or government agencies try to force a new technology down people’s throats, people are instantly put off.
And if we can see for ourselves that the new technology does not work, or at least, not as well as advertised, then most of us will be even more reluctant to adopt it.
If EVs are truly the way of the future, then people who want them will buy them at their own pace.
This massive, top-down investment in a new technology that many Americans still don’t trust will only lead to the embarrassing downsizing and financial consequences that Hertz is facing now.
These top-down approaches usually backfire in a free market like ours. So, while this whole affair is a bit of a debacle for Hertz, it is a shining example of the free market working just as it should.
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