The electric rental car still cannot find its place. Hertz tried it and it cost him 4 billion to discover it
In October 2021, Hertz announced with great fanfare that bought 100,000 Teslas worth 4.2 billion dollars. It was the biggest bet by a vehicle rental company on electric vehicles. He didn’t know what he had gotten himself into. And four years later, that bet has ended up becoming one of the most expensive lessons in history, because between 2023 and 2025, the company has accumulated losses of more than 4.5 billion dollars, a good part of them directly linked to that decision. What went wrong from the beginning. The business of a car rental company is not just renting, as they also need to sell the vehicles when they are paid for at the best possible price. And that is where the electric became a basic problem. electric cars They depreciate faster than combustion ones in the first three to five years, something that Hertz saw firsthand. When the fleet of Teslas began to lose value, the company was unable to place them on the second-hand market at a profitable price. The final blow came when Elon Musk decided reduce the price of new Teslaswhich automatically dragged down the value of the used cars that Hertz had in its fleet. In detail. Added to that were other problems that were not in the script. Electrical repairs they were more expensive Compared to combustion vehicles, tires wore out faster and many drivers simply did not want to rent an electric car. In addition, it should be noted that the charging network in the United States was (and partly still is) insufficient for travelers who do not fully know the specifics of charging an electric car. According to MarketWatch, electric cars in the United States they are not popular among rental customers precisely due to the scarce network of charging points in the country. And a car stopped in the parking lot does not generate income, but it does generate costs. The numbers of the disaster. In 2024 alone, Hertz registered a net loss of $2.9 billionafter having closed the first nine months of the year with 1,332 million in the red. The company rapidly sold the 30,000 electric vehicles that it planned to liquidate, and in 2025 it closed the year with a net loss of 747 million, although with an improvement of more than 2,000 million compared to the previous year. The results of 2025 We met them precisely a few weeks ago, in their financial report. The numbers are improving, but right now Hertz’s stock is trading near historic lows and the market does not quite believe the recovery. It’s not just Hertz. The company has not been the only one that has gone through this bad experience, in fact it has been a warning sign for the rest of the competitors. Avis Budget Group, the second largest global vehicle rental group, closed 2025 with losses of nearly 1 billion dollarsthe main reason being its electric fleet in the United States. The company had to register more than 500 million in asset impairment by reducing the estimated useful life of its electric cars, which caused them to plummet in the stock market by more than 20% in a single day after presenting results. Avis CEO Brian Choi even publicly acknowledged to investors that the quarter’s results were “unacceptable,” according to picked up SherwoodNews. Between the lines. A McKinsey report from April 2025 pointed out that only one in ten American consumers is considering going electric with their next purchase. If the customer who rents a car does not want an electric one, because he does not know where to charge it, because it generates range anxiety or simply because it is not comfortable, the rental company has an expensive vehicle that depreciates quickly and that spends too much time without generating income. Therefore, the equation does not work. And now what. Hertz has promised that 2026 will be the year of the turning point. The company anticipates revenue growth of between 4% and 6% in the first quarter of this year and has once again placed the depreciation target below $300 per month per vehicle, which was the figure it always indicated as the profitability threshold. Avis is also looking ahead cautiously. Both companies hope to improve results in 2026, relying on younger fleets and managing its electric cars more conservatively, adapting its presence in markets where there is a more mature charging infrastructure, as is the case in California. What is clear is that the great bet of massive electric rental in the United States has failed, at least in its first version. The electric car may have a future in rental fleets, but not at any price, not in any market and, of course, not without the customer being willing to get into it. Cover image | Ernie Journeys In Xataka | No matter what you do: the wheels of your car are revealing your position to anyone who wants to monitor you