Hertz’s Slow Progress in Electrification: A Setback for Tesla?
Hertz’s Slow Progress in Electrification: A Setback for Tesla?
Will Hertz be able to overcome the challenges and fulfill its plan of adding 100,000 Teslas to its fleet?
Hertz, the US-based rental car company, made headlines when it announced its plan to order 100,000 Tesla electric vehicles (EVs) by the end of 2022. However, the reality falls short of this ambitious goal.
Hertz’s plan to add 100,000 Tesla EVs into its rental car fleet has hit a roadblock. While the company currently has 50,000 EVs in its fleet, with 35,000 of them being Teslas, it is far from reaching its target by the end of 2022.
The company’s CEO, Stephen Scherr, admitted during an earnings call that their in-fleeting of EVs has been slower than expected. Only 11% of Hertz’s global fleet consists of EVs at present, and the goal of reaching 25% by the end of 2024 seems out of reach.
According to CNBC, one of the challenges Hertz faces is the high repair costs associated with EVs. Collisions and damages on an EV can cost twice as much as those on a traditional combustion engine vehicle. This has affected the company’s margins and financial performance in the third quarter.
In addition to repair costs, Hertz is also affected by price cuts in EVs, particularly those from Tesla. The lower market value of the EVs has created a larger loss for Hertz, leading to a greater burden. However, Hertz remains committed to its plan of purchasing 100,000 Teslas and 175,000 EVs from GM.
To address the challenges and reduce the risk of damage incidents, Hertz is working closely with Tesla and other automakers. The focus is on improving the performance of the EVs and finding ways to lower the costs of parts and labor. While Tesla’s supply network is still developing, automakers like GM have an established aftermarket parts supply network.
Despite the setbacks and challenges, Hertz’s collaboration with Tesla and other automakers, such as its recent deal with Polestar, aims to overcome the obstacles and continue its electrification rollout.
Hertz’s progress in electrification raises the question: Will they be able to achieve their ambitious goal of adding 100,000 Teslas to their fleet?
- Hertz currently has 50,000 EVs in its fleet, with 35,000 of them being Teslas.
- The company will not reach its target of having 25% EVs in its fleet by the end of 2024.
- Lower-than-expected margins in the third quarter were attributed to EV repairs.
- Price cuts in EVs and salvage value have caused financial burdens for Hertz.
- Hertz remains committed to purchasing 100,000 Teslas and 175,000 EVs from GM.
- Collaboration with Tesla and other automakers aims to reduce damage incidents and costs.
Hertz’s plan to purchase 100,000 Tesla EVs by the end of 2022 has faced obstacles due to slower-than-expected progress and challenges such as repair costs and price cuts. Despite these setbacks, Hertz remains committed to its electrification goals and is collaborating with Tesla and other automakers to address the issues and find solutions. The future of Hertz’s EV fleet expansion will depend on their ability to overcome these hurdles and achieve their ambitious targets.
