By Jo Nova

With the western world hurtling into new cars that are more costly, inconvenient, slower to refuel, and prone to burning down carparks and cargo ships, it was only a matter of time before the cracks in the socialist car market started to show.

Around the world tonight headlines are sharing the news that Hertz is selling off 20,000 EVs in order to buy some more fossil fuel cars. That can’t be inspiring for customers thinking of giving up their gas guzzlers. As Oilprice said: Hertz’s Big Move Into EVs Turned Out To Be A Dud.  And as Reuters headlined: Rental giant Hertz dumps EVs, including Teslas, for gas cars.

It was the perfect storm in a bad way. Apparently the customers didn’t want to rent them, and when they did and they scratched them, they cost too much to fix. Then the bottom fell out of the second hand market, and to recover the depreciation losses, Hertz would have to raise the prices of the product customers already didn’t want. There was no way this was going to work.

The official dry Hertz announcement politely says that customers want fossil fueled cars and EV’s were too expensive to fix:

“..expenses related to collision and damage, primarily associated with EVs, remained high in the quarter”

“The Company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine (“ICE”) vehicles to meet customer demand.”

Back in October 2021 it was all champagne and fireworks. Hertz put in an order for 100,000 EVs which was so exciting it pushed Tesla shares up 9% briefly to “a trillion dollar valuation”. (Two years later Tesla is worth 30% less.) At the time, Hertz expected to get the 100,000 cars by the end of 2022. Luckily for them, this didn’t happen. Instead they only got 50,000 by the end of 2022. This worked out to be about 11% of the Tesla total fleet. So these EV’s are not even very old. No one can say “the new models are better, because these are new models.

Some of the cars are already on the market. Two year old Telsa Model 3 EV’s are going for $22,000 US.

Hertz will book a $250 million dollar loss, and stocks in both Hertz and Tesla fell on the news.

Photo by Itai Aarons on Unsplash