Car rental service Hertz Global Holdings Inc HTZ has started selling its used Tesla Inc TSLA cars on the company website, months after it announced its intentions to scale back on the EV giant’s vehicles in its fleet.
What Happened: Hertz Inventory now shows about 518 Tesla vehicles for sale with about 455 Model 3 vehicles. The remaining are the EV maker’s best-selling Model Y.
The lowest price for a Tesla vehicle from Hertz’s inventory is $20,700 for a 2021 Tesla Model 3 Standard Range with solid black exteriors. The vehicle has traveled 86,929 miles and is located in Florida.
The lowest-priced Model Y available for purchase is a 2022 Model Y Long Range which has traveled 85,490 miles and is priced at $31,100.
For customers looking to buy a Tesla car who don’t mind if it was previously a rental, the inventory offers attractive choices as a custom-ordered Model 3 now starts at $38,990 and a Model Y at $43,990. Most of these vehicles are also within the battery warranty limits set by the EV maker.
While the battery warranty on the Model 3 Rear-Wheel Drive is applicable until 100,000 miles, the warranty on other versions of Model 3 and all available versions of the Model Y is up to 120,000 miles.
Why It Matters: Hertz announced its intention to scale back its EV fleet, especially Tesla vehicles, during its third-quarter earnings call. The company cited higher collision and damage repair costs for EVs compared to traditional vehicles, impacting results in the last quarter and negatively affecting EBITDA.
Hertz CEO Stephen Scherr explained that the decline in the Manufacturer’s Suggested Retail Price (MSRP) of EVs, particularly Tesla, throughout 2023 led to a lower fair market value for Hertz’s EVs compared to the previous year. This decrease resulted in larger losses and higher burdens in the event of salvage, negatively affecting EBITDA. Scherr emphasized that the third-quarter EBITDA margin would have been significantly higher if the entire fleet were traditional combustion engine vehicles.
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