Back in 2021, Hertz, a prominent player in the car rental industry, made headlines with its bold move to acquire 100,000 electric vehicles from Tesla. This strategic decision was a significant step towards Hertz's vision of having around a quarter of its entire fleet, approximately 500,000 vehicles, consisting of electric vehicles by the year 2024.

Tesla for as Low as $25,000 at Hertz

With an extensive inventory of electric vehicles, particularly Tesla models, Hertz boasts a wide selection available across numerous key metropolitan areas.

On a national scale, the average price for these vehicles hovers around $25,000, despite them being older editions. As reported by CNBC, Hertz Global Holdings has shifted gears since January, actively selling off 20,000 electric vehicles sourced from its global fleet.

This significant move accounts for nearly a third of the rental giant's existing EV inventory now available at dealerships. While initially signaling ambitious plans in 2021 to procure hundreds of thousands of Teslas, Polestars, and GM electric models.

This current sales approach highlights a recalibration in Hertz's electrification strategy. It also mirrors a broader reality check within the U.S. auto sector, where consumer adoption in 2024 is proving slower than anticipated in transitioning away from traditional gas-powered vehicles.

Hertz possesses a significant inventory of electric vehicles that the company is eager to sell at fixed prices without negotiation. An email from a Hertz official states that these EVs are widely accessible for purchase in the country's major cities, with an average cost of about $25,000.

A comprehensive 115-point inspection and a limited powertrain warranty of up to 12,000 miles or 12 months, whichever comes first, are included with every Hertz-certified car. Hertz also offers extended car protection options that go beyond the warranty and promises a buy-back option of seven days or 250 miles.

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Like any other used car shop, Hertz offers financing options and trade-ins. Moreover, federal tax credits of up to $4,000 are available for some used electric vehicles, and several states can provide additional tax breaks or rebates.

As detailed by a report from TheStreet, Hertz is actively introducing a significant number of Tesla vehicles into the secondary car market. Having over-purchased electric cars, the rental company is now swiftly offloading 30,000 EVs.

This strategic shift in Hertz's approach towards Tesla and electric vehicles coincides with a decrease in consumer demand for these eco-friendly options. Notably, the price of a pre-owned electric vehicle experienced a substantial 32 percent decline in March compared to the previous year, with a prominent 29 percent decrease observed specifically for used Teslas.

In stark contrast, the average price of a pre-owned conventional car saw only a marginal 3.6 percent reduction during the same timeframe.

Challenges for Hertz

Amid challenging circumstances, Hertz is facing a difficult period. As per TipRank, the company's stock price has plummeted by nearly 80%, accompanied by the resignation of the CEO and substantial financial losses in the process of offloading their Tesla inventory.

Although there is potential for improvement in the future, this optimism could also be overshadowed by looming challenges. While Hertz's stock currently trades at a discounted rate, prudent value investors may opt to exercise caution and await definitive indicators of a recovery before considering investment to steer clear of a possible value trap.

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