The Chinese-owned Polestar CEO was speaking one month after Hertz revealed it was selling 20,000 EVs because of high repair costs
US car rental giant Hertz is pausing plans to buy 65,000 EVs from Polestar, the Swedish firm’s CEO told the Financial Times today (February 6). It is seen by industry observers as another indication that the adoption of EVs and record sales growth has stalled.
The EV industry’s problems range from too-few fast charging points and high cost of initial purchase, to expensive insurance premiums blamed on expensive repair costs.
The FT reports today that the Chinese-owned carmaker’s Polestar CEO Thomas Ingenlath had been asked by Hertz boss Stephen Scherr last year to pause the deal for 65,000 Polestar EVs to be supplied to the rental car company by 2027.
Mr Ingenlath reportedly said Polestar had agreed to waive the Hertz supply deal, on the proviso that the rental car company wouldn’t offload its EVs at a significantly lower price or too soon.
Hertz must also “keep the cars longer than a year, we work with them, and we have the right to first refusal whenever they want to take them out of the fleet”, Mr Ingenlath told the Financial Times.
The revelation came after Hertz said on January 14 that is was selling 20,000 EVs and replacing them with petrol-powered vehicles.
When announced Hertz’s estimated $3 billion agreement with up-and-coming EV maker Polestar in 2022 was seen as a major moment for electric vehicle adoption.
It came after Hertz struck a similar deal with Tesla and agreed to buy 100,000 of its EVs in 2021. That deal has also had its issues, with Elon Musk’s barrage of price cuts driving down the value of Hertz’s fleet of used Teslas.
Price cutting in the face of strong Chinese competition led by Tesla but also Ford and some European manufacturers also saw Hertz exposed to the risks of high depreciation on the secondhand car market. The rental company uses a business model which sees it own its fleet outright, rather than with the option to sell its vehicles back to manufacturers for a set price.
