Hertz’s EV Gamble Pays Off for Used-Car Buyers: Used Teslas Now Available for as Low as $21,000
Hertz’s ambitious foray into the electric vehicle (EV) market, marked by a substantial investment in Tesla cars, is proving to be a windfall for used-car shoppers. The rental car giant’s miscalculated bet has led to a significant drop in prices, making EVs more accessible than ever.
In a bold move post-bankruptcy, Hertz purchased a fleet of 100,000 Teslas. However, the anticipated surge in EV demand failed to materialize, leading to a surplus of electric cars. Consequently, Hertz has been compelled to offload these vehicles through its Hertz Car Sales division, offering Teslas at bargain prices as low as $21,000.
The Context: Declining EV Demand and Market Shifts
The decline in demand for EVs in the U.S. has been a critical factor in Hertz’s predicament. Data from Kelley Blue Book reveals that while 269,000 EVs were sold in the first quarter, this represented a modest 2.6% year-over-year increase. In stark contrast, the previous year saw a robust 46.4% growth during the same period. Furthermore, first-quarter EV sales in 2023 experienced a significant 15.2% decline compared to the fourth quarter of 2023.
Tesla’s strategy of multiple price cuts over the past year further depreciated the value of Hertz’s EV fleet. In response to lackluster first-quarter financial results and a substantial $195 million devaluation of its electric vehicles, Hertz announced plans to sell 20,000 of its EVs by year’s end. This figure was later increased to 30,000, highlighting the urgency of their sales strategy.
Hertz’s Inventory and Pricing
For used-car buyers, Hertz’s predicament translates to unprecedented deals on EVs. Hertz’s website lists Teslas priced between $21,000 and $36,000, predominantly featuring 2022 and 2023 models. Additionally, several 2023 Chevy Bolt SUVs are available for around $16,000. The variance in prices is partly due to the mileage accumulated by these vehicles, a result of their use in Hertz’s rental fleet.
Market Dynamics and Future Prospects
The competitive landscape for affordable EVs is intensifying, with major players like Tesla, Hyundai-Kia, and General Motors driving prices down. According to Bloomberg Green, these companies now offer long-range EVs—capable of traveling 300 miles on a single charge—at prices below the average new car cost in the U.S. The 2024 Hyundai Ioniq 6, for example, starts at $47,000.
Looking ahead, the EV market is set to become even more competitive. Stellantis recently announced a forthcoming $25,000 electric Jeep, and General Motors is positioning a new Chevy Bolt EV as the market’s most affordable option by 2025.
The Current Automotive Landscape
Despite the push towards EVs, traditional gas-powered cars and hybrid electric vehicles that don’t require plugging in are seeing a resurgence. Industry experts maintain that while EV dominance is on the horizon, conventional vehicles remain highly relevant in today’s market.
However, for those eyeing the used-car market, Hertz’s significant discounts on EVs present a compelling opportunity. The availability of well-maintained, relatively new electric cars at such attractive prices is hard to ignore, making now an ideal time for potential buyers to consider making the switch to electric.
The Takeaway
Hertz’s failed EV strategy has inadvertently created a golden opportunity for used-car buyers. With a variety of EVs, including Teslas, available at deeply discounted prices, consumers can now access the benefits of electric driving without the hefty price tag typically associated with new models. As the automotive market continues to evolve, Hertz’s inventory clearance could be the perfect entry point for those looking to embrace the future of transportation on a budget.
