In a blow to the electric vehicle (EV) industry, Hertz, the car rental giant, has announced its decision to sell off one-third of its EVs and replace them with gas-powered vehicles due to low popularity and high maintenance costs. This move comes as frigid temperatures across the nation revealed that EVs struggle to charge efficiently in cold weather.
According to FOX Business, charging stations in the Chicago area have been overwhelmed with dead Teslas, leaving frustrated owners waiting for hours in freezing temperatures. Additionally, the cars’ batteries reportedly drain faster in frosty weather, reducing their range by 40% or more when the heaters are in use.
Hertz’s decision to divest from EVs is significant, considering the push by the Joe Biden administration to promote electric vehicle adoption. However, the inconveniences associated with inadequate charging infrastructure and higher maintenance costs have left U.S. consumers unconvinced.
The higher maintenance costs for EVs have become apparent, with tires burning up 20 to 40 percent faster than traditional internal combustion engine (ICE) vehicles. Furthermore, accident repairs for EVs are more expensive, with data from Mitchell showing that fixing an EV costs an average of $950 more than a gas-powered car.
High purchase prices remain a significant barrier to EV adoption, despite subsidies offered by the Biden White House. Cox Automotive reported that EV inventory remains well above the industry average, indicating a lack of demand. This situation is further exacerbated by the fact that Tesla sells directly to consumers, bypassing traditional dealer lots.
Hertz’s previous foray into the EV business in 2011 did not yield the desired results, ultimately reducing their EV offerings due to lack of popularity. This recent setback raises questions about the Biden administration’s approach to EV promotion and highlights the need for a more market-driven approach.
The decision by Hertz to sell off its EVs is expected to result in a cost of approximately $245 million, including incremental net depreciation expense. This cost is likely to be reflected in the company’s financial reports for the most recent quarter.
While the Biden administration continues to emphasize the importance of EVs in their climate agenda, consumer behavior indicates a lack of enthusiasm despite tax credits and environmental benefits. The recent revelation that EVs face challenges in cold weather further dampens the industry’s prospects.
In conclusion, the electric vehicle industry faces hurdles as Hertz’s decision to remove EVs from its rental fleet highlights issues of low popularity, high maintenance costs, and inadequate charging infrastructure. The Biden administration’s push for EV adoption will likely require a reassessment of strategies to address consumer concerns and market demands.
