Rental giant Hertz slashes EV fleet due to expense

Bruce Whitfield chats to Bronwyn Williams, trend translator and future finance specialist at Flux Trends.

Rental giant Hertz Global Holdings is selling off around 20 000 electric vehicles from its US fleet, including Teslas.

This comes two years after a deal with the EV manufacturer to offer its vehicles for rent, reports Reuters.

Hertz is dumping the vehicles in favour of petrol cars, citing high repair costs and low demand.

It's another sign that EV demand has cooled reports Reuters.

The rental firm had aimed to convert 25% of its fleet to electric by the end of 2024.

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Bruce Whitfield asks about the broader implications in conversation with Bronwyn Williams, trend translator and future finance specialist at Flux Trends.

Williams says Hertz's decision serves as an interesting case study on 'pragmatism versus policy'.

"When our values have to have a bit of a price, in this case quite a high one, it sometimes makes us choose slightly differently... If Hertz is taking these off the road because they are too expensive to repair, they're also saying that they're having more accidents, that people who rent the cars crash these electric vehicles more than they crash the old ones..."

Bronwyn Williams,Future Finance Specialist - Flux Trends

"These kinds of pragmatic stories about having to choose between profitability in the short term as opposed to longer-term value-based strategies are quite a sign of the times. People are concerned about the economy... and when businesses have to make choices they have to make choices based on the bottom line, based on that shareholder value... which can trump stakeholder value in a pinch."

Bronwyn Williams,Future Finance Specialist - Flux Trends

These kinds of signals are emerging not only in the EV market, but also in the world of ESG (environmental, social and governance) and of investing, she says.

And when it comes to switching towards new economies or greener economies, it is not something that can be done in isolation.

This is something that has to be done IN STEP with the rest of the market, Williams notes

"EVs are not something that can be adopted by even the best-meaning company with the biggest pockets to back their value, if the infrastructure AND the societal education in this case is not up to par. Until there are charging stations everywhere, it's not practical to drive these vehicles, from a demand perspective."

Bronwyn Williams,Future Finance Specialist - Flux Trends

"At the same time, if people haven't been taught how to drive these cars yet, the world is not ready... It's something we all kind of have to do together, which unfortunately might require some sort of policy coordination."

Bronwyn Williams,Future Finance Specialist - Flux Trends

In terms of trends for 2024, Williams believes the debate around shareholder versus stakeholder value is back on the table, even though it was thought this had been settled over the last few years.

"What you're seeing with Hertz, it's like they now have the market permission to act in this way... It's like the young investors who're no longer professing to even want to invest in ESG or sustainability-linked stocks any more.That's largely because we have tried to quantify our values as a society - instead of doing the right thing we tried to be paid to do the right thing, this is what ESG is all about."

Bronwyn Williams,Future Finance Specialist - Flux Trends

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