‘They even paid Tom Brady to do the marketing for them: Hertz’s Tesla deal has cost them billions. But there was always one major problem for customers, expert says

24.02.2025 09:00

The Daily Dot

Hertz may be learning the hard way that going full throttle on electric vehicles isn’t a smooth business strategy. Not too long ago the rental car giant bet big on Tesla, dropping more than $4 billion to electrify its fleet, and hiring Tom Brady to make it look sexy.

But it looks like the Hertz EV investment has the company in a financial skid as it is dumping EVs at bargain prices that could result in a staggering multi-billion-dollar loss.

TikTok user and auto industry enthusiast Chris Pearce (thechristopherpearce) is backing his claims that Hertz is “cooked." His recent video on the brand has amassed more than 412,000 views.

Hertz's Telsa deal failed. Why?

There is some financial nitpicking we have to do with some of Pearce’s claims, starting with his statement that the stock price for Hertz Global Holdings, Inc. had dropped 11% since its most recent earnings announcement, which took place on Feb. 13.

HTZ was priced at $4.45 on Feb. 11, dropped just over 12% to $3.90 on the day of its earnings call that included news of a projected $2.9 billion loss from the Hertz EV investment. The stock price recovered to $4.04 the following day, and by the following Monday was at $4.50, slightly up from its price just before the earnings news.

The Hertz EV order for 100,000 Tesla Model 3 sedans in late 2021 was intended to be an audacious move. Valued at approximately $4.2 billion, company leaders wanted to position Hertz at the forefront of the rental car industry's shift toward electrification, with the "Hertz, Let's Go!" marketing campaign featuring seven-time Super Bowl champion Brady promoting a premium EV rental experience.

Customers say 'no thanks' to renting EVs

Hertz encountered significant challenges with EV adoption among its customer base, and by mid-2024 it was apparent the company and its competitors needed to get out of the EV rental market. The misfire is forcing the company to sell off thousands of used Teslas at steep discounts down to $25,000, though Pearce shows pricing closer to $20,000 in his video.

The Hertz EV bad gamble highlights broader issues within the EV market. While Tesla's early success spurred a competitive rush among automakers to electrify their fleets, consumer demand hasn't consistently matched these ambitious production goals.

Consumers have been hesitant to buy or rent electric vehicles due to several key concerns:

Affordability: EVs still generally have a higher upfront cost compared to gasoline-powered cars, making them less accessible.
Charging Infrastructure & Range Anxiety: Many consumers worry about the availability of charging stations and fear their vehicle may not have enough range for long trips.
Battery Replacement & Maintenance Costs: Battery degradation and potential replacement costs create uncertainty about long-term affordability.
Uncertain Resale Value: Rapid changes in EV technology and fluctuating incentives make it difficult for buyers to predict long-term value.
Driving & Usability Adjustments: Features like regenerative braking and differences in handling can make EVs feel unfamiliar or intimidating to some drivers.

Hybrids hot again?

Several manufacturers have reassessed their EV strategies, with Ford last year canceling its plans for a three-row electric SUV and incurring a $1.9 billion write-off. Similarly, General Motors and Honda have scaled back their EV targets, reflecting a cautious approach in light of market realities.

While electric vehicles offer a pathway to reduced emissions, automakers are adjusting their strategies, with some shifting focus back to hybrid models or delaying EV projects. For example, Ford's recent decisions to halt certain EV productions and invest more in hybrids reflect a strategic pivot to meet consumer demand and market conditions.

Viewers react to Hertz's Tesla deal

Commenters on the clip agreed that Hertz did a poor job of gauging the public’s appetite for electric vehicles.

“I work in car rentals. No customer wants to rent them. Charging stations are nightmares,” one of them wrote.

Another observed, “EVs don't understand the modern American renter. Fifty minute charge? No thanks. Stop in the middle of nowhere to charge? No way. Elon Musk? Yuck.”

And an enthusiastic EV owner offered their agreement that the cars are a bad fit for newcomers.

“As an EV owner, great to own but barrier of knowledge about usage makes it a terrible rental car. Hertz ruined their reputation without the EV debacle.”

@thechristopherpearce Hertz can’t stop losing #carnews ♬ original sound - Chris Pearce

The Daily Dot reached out to Pearce via direct message, and to Hertz via email.

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