As Tesla’s stock reached all time highs back in 2021, car rental company Hertz made a big bet by buying up about 30,000 Teslas vehicles for its fleet, sending the EV maker’s value soaring even higher.
But as it turns out, that was an extremely costly mistake, as New York Magazine reports. As of last month, the company had only sold off 10,000 EVs, and plans to sell 30,000 total.
The rest may prove even more difficult to sell, with prospective buyers being scared away by high mileage and glaring problems with the Tesla rentals that could cost a fortune to fix — an ironic fate considering EVs were once sold as being incredibly cheap to maintain.
One buyer, who picked up a 2022 Model 3 with 70,000 miles on it for just $25,000, immediately regretted his decision, with a body shop discovering a sizeable hole in the bottom of the vehicle that was causing damage to the battery — a $13,000 bill that wasn’t covered under warranty.
“I realized why they were trying to get rid of those Teslas,” the owner, Bijay Pandey, told the magazine. “If anything happens to a Tesla, then the bill is too high.”
Even before buying the EV fleet, Hertz had been through a pandemic-related bankruptcy, only to be propped up by investors by becoming one of the first meme stocks.
The company has wiped out billions of dollars in value since, with CEO Stephen Sherr stepping down.
Meanwhile, Tesla’s even struggling to sell brand-new vehicles. The Elon Musk-led company noted a massive drop in quarter-over-quarter sales earlier this year, likely spurred on by rising competition, slowing overall demand for EVs — and of course disillusionment over Tesla’s polarizing CEO.
In other words, offloading extremely beaten-up and high-mileage Teslas is anything but easy, making Hertz’s big bet a disastrous financial decision.
In the first quarter of this year, the rental company took a massive $195 million hit due to its undesirable Tesla fleet depreciating. In total, the company has lost almost half a billion dollars on its failed bet on EVs.
On Reddit, users were quick to dissuade interested buyers who were tempted by the lower prices.
“Yeah my advice is don’t buy a used rental car from Hertz,” one user wrote.
Others pointed out the abuse they had been put through already.
“The mileage is too high for the prices they are charging,” another user argued. “Especially for rentals. You know everyone who rented an EV is gunning it any chance they got.”
Nonetheless, Hertz’s new CEO Gil West is adamant that the company will be able to sell off the remaining 20,o00 EVs “by the end of the year,” as NY Mag reports.
At least there’s a happy ending for Pandey, who reportedly finally got a Tesla that “met his needs and preference.”
More on Hertz: Hertz Is Unloading Hundreds of Teslas for Cheap
Source Agencies
