Rental car companies are not as energized as they used to be about electric vehicles (EVs), having found out that they are hard to resell at a decent price.
In January, rental car giant Hertz Global Holdings, Inc. (NASDAQ:HTZ) scaled back plans to buy 100,000 EVs after seeing that their resale plummeted much faster than expected, the New York Times reported.
A main reason why used EVs lose so much value is because Tesla, Inc. (NASDAQ:TSLA) lowered the prices on new models last year to boost sales, the New York Times reported.
This has left many rental car outfits scrambling to resell EVs at deep discounts and apprehensive to start buying more of them.
EV manufacturers have sold 1.4% of their cars and trucks to rental companies so far this year, down from selling 4% of them in 2023, according to S&P Global Mobility. So far this year, that number is just 1.4 percent.
Also Read: What's Going On With Hertz Global Stock Today?
Rental car companies have also had a difficult time renting EVs at a profit because most of them lack charging stations and insurance premiums have increased as many renters have underestimated EVs' acceleration and gotten into accidents, the New York Times reported.
Meanwhile, some companies found they couldn't get spare parts for EVs as quickly as they could for gasoline cars.
Price Action: Tesla gained 1.78% on Monday to close at $252.64, while Hertz jumped 5.69% to $4.27.
Exchange-traded funds that hold Tesla stock gave mixed reactions on Monday. T-Rex 2X Long Tesla Daily Target ETF (NASDAQ:TSLT) gained 3.69% to $19.96 at close, while Direxion Daily TSLA Bull 2X Shares (NASDAQ:TSLL) gained 3.71% at $14.54 and The Meet Kevin Pricing Power ETF (NYSE:PP) ticked down 0.27% to $31.52. The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) slipped 0.11% to $191.27 and Direxion Daily Cnsmr Discret Bull 3XShrs (NYSE:WANT) slid 0.34% to $37.92.
ETFs that hold Hertz stock trended upward on Monday. Counterpoint Quantitative Equity ETF (NYSE:CPAI) gained 0.033% to $31.78 as Invesco S&P SmallCap 600 Pure Value ETF (NYSE:RZV) edged up 1.13% to $104.18 and SPDR S&P Transportation ETF (NYSE:XTN) inched up 1.68% to $80.44. Global X Guru Index ETF (NYSE:GURU) gained 0.087% to $44.89 and Invesco S&P SmallCap 600 Revenue ETF (NYSE:RWJ) increased 1.28% to $41.98.
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Photo: Tesla Model Y, Courtesy of Tesla