In 2021, rental car giant Hertz (HTZ) took a massive gamble that would define an unfortunate part of its future.
To respond to consumer interest and the growing adoption of electric vehicles, Hertz announced “a significant investment” in EVs, including an initial order of 100,000 Tesla (TSLA) vehicles and charging infrastructure by the end of 2022.
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To make a big splash out of its big EV commitment, Hertz enlisted the seven-time Super Bowl champion quarterback Tom Brady to showcase its new EV rentals in commercials and other promotional materials, noting in a statement at the time that the company was “changing the game.”
“I’ve been driving an EV for years and knowing Hertz is leading the way with their electric fleet speaks to how the world is changing and the way companies are approaching being environmentally and socially conscious,” he said in a 2021 statement.
Even with Brady on its back, Hertz’s dive into the electric deep end was a move that proved to be much riskier than expected, as it struggled to tackle many issues that led it to sell off much of its fleet and take on a massive loss.
Hertz finishes its EV fire sale, absorbs $2.9B loss
When Hertz announced its purchase of 100,000 Teslas in October 2021, the value of the vehicles was worth $4.2 billion at the time.
However, in 2025, the numbers speak for themselves. During Hertz’s Q4 2024 earnings released yesterday, it revealed a $2.9 billion loss in 2024 due to its EV gamble. In Q4 2024 alone, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reflected a $357 million loss.
“As I reflect on my first eight months at Hertz, 2024 was undoubtedly a challenging year for our company,” Hertz CEO Gil West said during its earnings call. “We’ve taken the necessary actions to turn the page on the past and set Hertz up for on-going success.”
These actions included offloading its EVs, most of which were Tesla vehicles. The company announced that it finished selling 30,000 electric vehicles from its fleet, an initiative that started in 2023 and finished during Q4 2024.
Hertz’s CFO, Scott Haralson, warned that the company can expect another quarter of losses, as it clears out more EVs and other vehicles that experience high depreciation from its fleet.
According to the CEO, the new strategy is to align the fleet with consumer preferences and lean more towards lower-maintenance cars that do not depreciate. Currently, it is showing that its vehicles lose about $422 of their value in depreciation a month, per vehicle, in Q4 2024; a 16% drop from the same period in 2023 but still higher than historical rates.
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Why did Hertz sell its EVs?
Hertz began offloading its EVs in 2023 when Tesla began aggressively cutting prices of its popular models to better compete with the rest of the EV market.
Though this was good news for Tesla buyers, it hurt the used market, as the price of used Tesla aggressively dropped. Additionally, other automakers competing against Tesla in the marketplace also made price cuts for their EVs in response, which only put the depreciation madness into overdrive.
The business model of Hertz and other rental car companies relies on their fleets of rental cars holding their value. In addition to their rental service, rental car companies make money by selling their used rental cars after they reach a certain mileage through their respective used car operations.
Related: Hertz to sell 20,000 EVs, buy gas-powered vehicles amid rental-demand slump
The rapid depreciation of used Teslas—mostly Model 3s—accelerated past the point where Hertz saw them as virtually worthless much faster than they anticipated. Additionally, according to MarketWatch, EVs were not popular options at rental desks, “given the limited network of charging stations across the U.S.” and repair and maintenance costs were much higher than its traditional gas-powered vehicles.
“MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that as salvage creates a larger loss and therefore greater burden,” then-Hertz CEO Stephen Scherr said in its Q3 2023 earnings call.
“On a unit basis, we achieved productivity gains across most categories of auto. The exception remained vehicle damage costs, particularly those on our EVs.”
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Despite Hertz loss, U.S. EV sales are up
Despite Hertz’s sell-off of its EVs, its shifting fleet is not entirely representative of the curious state of the electric market.
According to new data from S&P Global Mobility, new registrations of battery-electric vehicles jumped 25% in December 2024 as buyers took advantage of year-end deals and fears over the $7,500 tax credit being taken away during the Trump administration.
EVs made up 9.9% of the total auto market, a significant year-over-year increase from 8.5% the same month in 2023. In 2024, EV registrations rose to rose to 144,070 from 115,217 the previous year.
“There’s so much discussion about how EVs have slowed down — and they have — but they certainly have not stopped growing,” S&P Global Mobility analyst Tom Libby said. “EVs are alive, and they’re kicking.”
Hertz Global Holdings, Inc. trades on the NASDAQ as (HTZ) .
Tesla, Inc. trades on the NASDAQ as (TSLA) .
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