News: Hertz will stop buying EVs from Polestar

News: Hertz will stop buying EVs from Polestar is profiled by BTW Media because public-source evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Hertz, initially committed to a significant expansion of its electric vehicle (EV) fleet with Polestar and Tesla acquisitions, has reversed its plans due to substantial EV depreciation, price reductions, and repair costs.
• Facing an anticipated loss exceeding $245 million, Hertz recently sold 20,000 Teslas and suspended its deal with Polestar.
• The move reflects challenges in meeting EV targets, signalling financial setbacks and a strategic shift in response to market dynamics.

Hertz is retracting from its commitment to expand its electric vehicle (EV) fleet, reportedly pausing plans to acquire additional EVs from Swedish automaker Polestar.

Also read: Polestar Day reveals electrifying future with Polestar 3 electric vehicle

Hertz is facing a substantial financial setback

Initially, Hertz intended to purchase 65,000 battery-powered Polestars alongside 100,000 Teslas in 2022. However, due to factors such as significant EV depreciation, price reductions (primarily from Tesla), and escalating repair expenses, Hertz is now facing a substantial financial setback, projecting a loss exceeding $245 million on these agreements. This strategic shift is disappointing for Hertz, which previously aimed for 25% of its fleet to be electric by the end of 2024.

Hertz previously announced the sale of 20,000 Teslas

Recently, Hertz announced the sale of 20,000 Teslas, approximately one-third of its electric fleet, and has now suspended its deal with Polestar. Polestar CEO Thomas Ingenlath confirmed that Hertz CEO Stephen Scherr contacted him about the pause last fall, and during 2022-2023, Polestar sold around 13,000 vehicles. Hertz follows an ‘at-risk’ model, owning the vehicles outright, in contrast to the ‘buyback’ model used by some rental companies. Ingenlath revealed that Polestar agreed to waive the requirement to purchase all 65,000 vehicles, provided Hertz committed not to quickly or inexpensively sell off its existing EV stock.

Also read: Tesla is set to construct a new $25,000 EV model by mid-2025

Although the EV market continues to thrive, with over 1 million plug-in vehicles sold in the US in 2023 and a market share of just under 8%, some manufacturers, including Hertz, are re-evaluating and adjusting their EV commitments due to financial challenges and softer demand than anticipated in previous years.