Hertz continues its electric car clearance operation. The rental company is looking to get rid of 30,000 models by the end of the year. There are some good deals, including Tesla Model 3s under $20,000. Everything must go!
Giant electric car sale
In 2021, Hertz hoped to get a head start on its competitors by acquiring a gigantic fleet of electric cars. But the experience went badly for the American company. The cause is the excessive depreciation of the models, which causes the company to lose a lot of money. Result: a gigantic clearance sale is organized in Uncle Sam’s country to get rid of 30,000 models.
The operation has been going on for several months. But after mediocre results, Hertz decided to cut prices to accelerate the sale of its electric cars. Ultimately, the firm only wants to keep enough vehicles to meet demand from customers who want to reserve an electric one. The company absolutely wants to avoid accumulating heavy losses on depreciating stocks.
Tesla Model 3 for $17,000?
At Hertz, electric vehicle depreciation increased 89% to $537 per car per month. The rental company currently sells its Teslas on its website. At the time of writing, it is possible (provided you cross the Atlantic) to buy an old rental car for less than $20,000 (18,900 euros). A price from which the $4,000 tax credit must be deducted.
Also readThe problems of poor resale value of electric cars
Concretely, Americans can afford a 2021 Tesla Model 3, with fairly high mileage, for around $14,000 (13,300 euros). Hertz plans to continue its purge until 2025. But how did the company get to this point? The initial idea was rather intelligent: electric cars require less maintenance. In theory, this should have meant less spending for Hertz.
Hertz, victim of the Model 3 price roller coaster
But the situation changed when Elon Musk’s firm decided to reduce the prices of its new models overnight. A price roller coaster since 2019, with a sudden drop in 2021. This had the effect of lowering the price of used Teslas and causing depreciation to skyrocket. At Hertz, this situation logically led to a devaluation of assets (the cars in its possession).
When a lessor invests in tens of thousands of cars at full price and the manufacturer drops the price drastically several times during the holding period, the lessor loses a lot of money very quickly. Hertz has most likely suffered the brunt of a changing market. Regardless, this is a great deal for anyone in the market for a used electric car.
The rest of your content after this announcement
The rest of your content after this announcement
