Hertz swaps electric cars for gas ones, discards thousands
Hertz Dumps Electric Vehicles Due to Low Demand and High Repair Costs
Hertz, one of the largest rental car companies in the U.S., is making a surprising move by getting rid of tens of thousands of electric vehicles from its fleet. The company cites low demand and the burden of high repair costs as the main reasons behind this decision.
“The dramatic about-face, after Hertz announced plans in 2021 to buy 100,000 Tesla Inc. vehicles, underscores the waning demand for all-electric cars in the US,” Bloomberg News reported. “EV sales growth slowed sharply over the course of 2023, rising just 1.3% in the final quarter as consumers were put off by high costs and interest rates.”
It seems that U.S. consumers have serious concerns about the electric vehicle market. These concerns range from the expensive price tags of the vehicles to the lack of charging stations across the country. Additionally, electric vehicles have shown significant reductions in their driving range during extreme weather conditions, be it extreme cold or heat.
“The elevated costs associated with EVs persisted,” Hertz Chief Executive Officer Stephen Scherr said. “Efforts to wrestle it down proved to be more challenging.”
In an attempt to better balance the supply and expected demand of electric vehicles, Hertz hopes that selling off over 20,000 electric vehicles will be a step in the right direction. The company expressed this intention in a regulatory filing.
Analysts from Morgan Stanley have warned the entire auto industry about the reality of the electric vehicle market. They believe that the popularity of electric vehicles is not as high as expected, and growth expectations need to be significantly reduced.
This news follows a letter sent by nearly 4,000 auto dealers across the U.S. to President Joe Biden, expressing their skepticism about his goal of making two out of every three new cars sold by 2032 electric. The dealerships stated that the demand for electric vehicles is not keeping up with the influx of battery electric vehicles arriving at their lots, despite price cuts, incentives, and government support.
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“Mr. President, no government agency, no think tank, and no polling firm knows more about the automobile customer than us,” the letter continued. “Some customers are in the market for electric vehicles, and we are thrilled to sell them. But the majority of customers are simply not ready to make the change.”
What role do the high repair costs associated with electric vehicles play in companies like Hertz deciding to eliminate them from their fleet, and how does this impact the overall outlook for the electric vehicle industry
Ng infrastructure. While electric vehicles have been promoted as a solution to combat climate change and reduce emissions, it appears that the reality on the ground is not aligning with these expectations.
One of the major hurdles for consumers is the high cost associated with electric vehicles. Despite advancements in technology and economies of scale, electric vehicles still come with a hefty price tag. This poses a challenge for many consumers who cannot afford to pay the premium price for an electric vehicle compared to a traditional gasoline-powered car. The initial investment and ongoing maintenance costs are a deterrent for potential buyers.
Another issue that affects the demand for electric vehicles is the lack of charging infrastructure. Electric vehicles require access to charging stations to recharge their batteries, and unfortunately, the infrastructure in the U.S. is not yet widespread or convenient enough. This creates range anxiety among consumers, as they fear running out of power while on the road and not being able to find a charging station nearby. Until the charging infrastructure is significantly improved and easily accessible, the adoption of electric vehicles will continue to face hurdles.
The high repair costs associated with electric vehicles also play a significant role in Hertz’s decision to dump them from its fleet. While electric vehicles are known for their lower maintenance requirements compared to gasoline-powered cars, repairs can be quite expensive. The specialized components and technology in electric vehicles often require specialized training and equipment to repair, driving up the costs. Rental car companies like Hertz face the challenge of maintaining their vehicles at a reasonable cost, and the high repair costs associated with electric vehicles add an additional burden.
Interestingly, Hertz’s decision to get rid of its electric vehicles comes after announcing plans to purchase a significant number of Tesla vehicles. This demonstrates the volatility and uncertainty in the electric vehicle market. Companies and consumers alike are trying to navigate the evolving landscape, with various factors influencing their decisions.
The low demand for electric vehicles and the high repair costs present a challenging outlook for the electric vehicle industry. It highlights the need for further investment in infrastructure and technology to address the concerns of consumers. The government, private sector, and automakers must work together to make electric vehicles more affordable, improve charging infrastructure, and reduce repair costs to boost consumer confidence and demand.
In conclusion, Hertz’s decision to eliminate electric vehicles from its fleet due to low demand and high repair costs sheds light on the challenges facing the electric vehicle industry in the U.S. The expensive price tags, lack of charging infrastructure, and high repair costs are factors contributing to the waning demand for electric vehicles. To overcome these challenges and promote mass adoption of electric vehicles, significant investments and collaborative efforts are required. Only then can the electric vehicle industry truly realize its potential in combating climate change and reducing emissions.
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