Car rental company SIXT drops Tesla EVs from its fleet due to poor resale value, high repair costs
01/23/2024 / By Olivia Cook
Car rental company SIXT has announced that it would drop Teslas from its electric vehicle (EV) fleet due to poor resale value and high repair costs.
In an email to customers obtained by Bloomberg, the company cited higher repair costs for EVs compared to gas-powered counterparts as a main reason for the move. These higher costs, according to the outlet, have compounded the issues with lower resale values. Moreover, Bloomberg added that “Tesla’s aggressive price cuts [have] hurt residuals.”
The family-owned SIXT, which hails from Germany, arrived in the U.S. in 2011. Currently the nation’s fourth-largest car rental company, it maintains a fleet of about 20,000 cars in 52 operating outlets across the country.
Following its move to ditch Teslas, it also announced an agreement with auto maker Stellantis to buy as many as 250,000 vehicles from the latter. Under the deal, Stellantis will provide a mix of combustion engine, battery-electric and plug-in hybrids. Stellantis came into existence in January 2021 following the merger of Fiat Chryser Automobiles and France’s PSA Group.
According to a press release, SIXT said it still aims for EVs to make up 70 to 90 percent of its offerings in Europe by 2030.” Meanwhile, Stellantis said it aims for battery-powered vehicles to make up half or 50 percent of its light truck and passenger car offerings by the same year.
“This agreement with Stellantis … underscores our promise to provide our customers with the best choice for all their mobility needs,” said Konstantin Sixt, co-CEO of the car rental firm.
Hertz shrinks its EV fleet in favor of gas-powered cars
Hertz Rent-A-Car, the largest U.S. fleet operator of rental EVs in the country, also eschewed its fleet of Tesla and Polestar EVs. According to Reuters, the company’s decision to stage an “EV fire sale” for 20,000 units stemmed from a myriad of reasons. These include higher collision and damage repair costs; challenges in getting replacement parts; a lack of sufficient expertise in dealing with such vehicles; and weakened demands for the vehicles it offers on rent. (Related: Bumpy road ahead: Rental giant Hertz dumps electric vehicles for gas-powered counterparts.)
During the company’s third-quarter earnings call in October 2023, Hertz CEO Stephen Scherr flagged concerns similar to those cited by SIXT. He added that the company even limited the torque and speed on the EVs, and offered them to more experienced users to ensure easier rides after certain renters had front-end collisions.
This eventually translated to the decision to sell off some of the company’s EV units. According to a Benzinga report, about 518 vehicles from Elon Musk’s firm are up for sale on the company’s website – 455 Model 3s and 63 Model Ys.
“Having rented several Model 3s from Hertz over the past six months, my observation is some of them are cosmetically pretty rough,” said Scott Case, CEO of EV research firm Recurrent Auto.
“The larger impact of Hertz’s EV fire sale is the perception hit to the technology, said Karl Brauer, analyst at used-car aggregator iSeeCars.com. “Mainstream consumers are already hesitant to buy an EV, and this news only supports their concerns.”
Head over to FlyingCars.news for more stories about EVs.
Watch auto expert John Cadogan weigh on SIXT’s declaration that Tesla EVs are too expensive to own and run below.
This video is from the Daily Videos channel on Brighteon.com.
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bubble, business, car rental, collapse, debt collapse, economic riot, electric cars, electric vehicles, EV repairs, finance riot, gas powered cars, green living, Green New Deal, Hertz, lower resale value, market crash, money supply, Polestar, products, risk, robocars, SIXT, Stellantis, tesla
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