‘Crazy cheap’ Teslas hit the market as Hertz fire sale intensifies after error buying 100,000 EVs

Hertz’s decision to buy 100,000 Teslas has backfired badly, but it does mean that cheap electric cars are there for the taking.

The car rental giant started selling off its stock of Teslas a year ago – due to a lack of demand from customers who prefer petrol models. Bosses also said they wanted to offload the cars due to the high cost of repairs.

Slow demand forces Hertz to sell its electric vehicles at deep discounts.

This past week, a Hertz customer shared a stunning deal on Reddit: a 2023 Tesla Model 3 for just $17,913 — less than half its retail price of $38,990.

In January, the company said proceeds from the sale would go toward financing more gas-powered vehicles.

It deviates from the previous target that 25 percent of the total fleet would be electric by the end of 2024.

In 2022, it said it would buy up to 65,000 electric vehicles from Polestar over five years. That was just months after it ordered 100,000 cars from Tesla.

The sales of the EV fleet are in line with a broader trend in the American car market, in which demand for electric cars appears to have fallen.

The price cut comes after a difficult financial year for Hertz, which last month reported a wider-than-expected third-quarter loss and missed revenue estimates.

In the past week, a Hertz customer shared with Reddit a deal they received to purchase a 2023 Model 3 Tesla for $17,913 – less than half the retail price of $38,990

The company recorded an asset impairment charge of $1 billion during the quarter, citing a decline in fleet values ​​and an overall decline in car prices as consumers postpone purchases in the current economy.

In its latest report, market research firm Cox Automotive said affordability remains a challenge for consumers as there are fewer models on sale in the $15,000 price range, which is more popular among used car buyers.

Hertz’s unit depreciation rose 89 percent to $537 million in the quarter ended September 30 from a year earlier.

On an adjusted basis, the company lost 68 cents per share, compared with the average analyst estimate of a loss of 50 cents, according to data compiled by LSEG.

In April, the company reported a $392 million first-quarter loss, with former CEO Stephen Scherr telling investors they “continued to face headwinds related to our electric fleet.”

Scherr said the company’s strategy going forward was to plan for a reduction in the number of EVs and sell 30,000 of them by the end of the year.

The company recorded an asset impairment charge of $1 billion during the quarter, citing a decline in fleet values

Hertz brought on superstar football player Tom Brady, seen here, as part of their ad campaign to promote the EVs in their fleet

It was a sharp turn in their 2021 plans to purchase 100,000 of these cars, even enlisting the help of Tom Brady to promote the venture.

In a filing with the Securities and Exchange Commission (SEC) earlier this year, Hertz noted that the decision to sell the cars would likely cost about $245 million due to differences between their value at the end of 2023 and the prices they ultimately sell for. .

The depreciation of its electric fleet in recent years is another phenomenon that Hertz has alluded to previously.

Many of the Teslas it bought were leased to Uber as part of a scheme that allowed drivers to rent them for work, starting at about $330 a week.

While Teslas are a popular choice among taxi drivers, there are several complications when it comes to renting a Tesla for a trip, such as limited range and a possible lack of access to charging stations.

A spokesperson for Hertz said: “Many people don’t know we sell cars. By connecting our rental customers who have signed up for our emails to our sales channels, we are not only raising awareness of the fact that we sell cars, but also offering a unique opportunity to someone who may be looking for the same car as she. rent.’