HERTZ TO SELL EVS IN SHIFT BACK TO GAS-POWERED CARS

The rental car company Hertz will be selling about one-third of the electric vehicles in its fleet after they lost value more quickly than expected, the company said Thursday. The drop in value is a blow to the company’s efforts to replace gasoline vehicles with cars that do not produce tailpipe emissions.

The EVs the company owned were also more likely to be involved in collisions, Hertz said, and they proved costly to repair. The company said it planned to buy more gasoline-powered vehicles to replace the 20,000 batterypowered cars it was selling.

Hertz CEO Stephen Scherr partly blamed the company’s decision to sell 20,000 vehicles on “unprecedented” price cuts by Tesla that undercut the cars’ resale value.

Tesla vehicles, which make up the largest share of Hertz’s electric fleet, plunged in value after the carmaker, which Elon Musk runs, cut prices last year by about 30 percent. When the price of new vehicles is drastically lowered, it drives down the value of used cars because buyers can get the newer versions for less.

As a result, Hertz was forced to write down the value of its electric cars more quickly than it had expected, which weighed on profit, Scherr said.

Rental companies like Hertz estimate how much their cars will be worth when they eventually sell them, and that estimated decline in value is calculated as a cost. If the decline is more than expected, profit falls.

Scherr also said that Tesla was less willing than other carmakers to give Hertz volume discounts on replacement parts.