Hertz’s own numbers tell the story bluntly: the company took a $245 million loss on EV sales in the fourth quarter of 2023 alone, and by the end of that fleet reduction had offloaded 30,000 electric vehicles, according to Hertz’s own fourth-quarter and full-year 2024 earnings release. Two years later, Avis Budget Group posted its own reckoning: a $995 million net loss for full-year 2025, with $518 million of that tied specifically to EV impairment charges in the fourth quarter, per Avis’s own results reported in February 2026. What started as one company’s aggressive electric bet has turned into an industry-wide retreat, and the numbers behind it keep getting bigger, not smaller.
Hertz’s Reversal, in Its Own Words
Hertz’s electric experiment began with real ambition: a 2021 deal to buy up to 100,000 Teslas and a five-year agreement to purchase as many as 65,000 Polestars. By January 2023, the company was already walking that back, announcing it would sell roughly a third of its global EV fleet and redirect proceeds toward gas-powered vehicles, citing higher collision and damage repair costs on EVs relative to the rest of its fleet. The company’s own Q4 2024 results confirmed the reduction plan had run its course: “30,000 EV fleet reduction announced in 2023 has been completed,” with the release noting the $245 million EV disposal loss recorded in Q4 2023 did not repeat the following year, a direct, if quiet, admission of how expensive the original bet turned out to be. The planned Polestar purchases were paused as part of the same retreat.
Depreciation Was the Real Killer
The financial mechanism behind both companies’ losses is the same one that makes rental fleets work at all: cars get bought, driven hard for a year or two, then resold, and the difference between purchase price and resale value is the cost of doing business. Used battery-electric vehicle prices fell roughly 31.8% over a 12-month stretch during the period rental companies were trying to unload their EVs, a decline steep enough to blow up the resale math fleets depend on. Sixt USA, a smaller player in the same market, absorbed roughly $43.6 million in EV-related depreciation costs in 2023 alone as it cut its own battery-electric inventory. Layered on top of depreciation, research cited across the industry put battery-electric repair costs about 29% higher than comparable gas vehicles, with EV-specific parts running roughly 48% more, costs that hit a rental fleet especially hard, since rental cars get returned with more dings, scrapes and collision claims than the average personally owned vehicle.
Avis Follows the Same Path, Just Later
Avis’s turn came two years after Hertz’s, and it played out in similar fashion. Avis Budget Group’s fourth-quarter 2025 results showed the company had reviewed its EV holding strategy and decided to keep certain electric vehicles for a shorter period than originally planned, forcing a write-down of their recorded value to match what the used market would actually pay. In December 2025, Avis sold a batch of EVs to a joint venture and collected $183 million in cash tied to tax-credit monetization, a sign the company was actively working to exit positions rather than ride them out. CEO Brian Choi framed the reset as “a catalyst for meaningful change” going into 2026, language that echoes almost exactly what Hertz executives said about their own fleet three years earlier.
Renters Never Fully Bought In
Underneath the balance-sheet damage sits a simpler problem: demand from actual renters never caught up to the fleets automakers and rental companies built for them. The American Car Rental Association has pointed to range anxiety, inconsistent access to public chargers, and general unfamiliarity with EVs as recurring reasons renters steer away from electric options at the counter, even when offered a comparable price to a gas car. That mismatch — expensive vehicles that depreciate fast, cost more to repair, and customers don’t specifically request — is a hard combination for any fleet manager to defend twice, let alone repeatedly.
The Long Game Hasn’t Disappeared
None of this necessarily means rental EVs are gone for good. Federal emissions standards covering model years 2027 through 2032 are pushing automakers toward a much higher share of electrified sales industry-wide, and some analysts expect that pressure to eventually flow through to fleet purchasing again, EV pullback or not. For now, though, both of the industry’s two largest players have gone through the same expensive lesson roughly two years apart: buying electric vehicles ahead of proven rental demand is a bet that shows up first as a balance-sheet write-down and only later, if ever, as a strategy that pays off.
Hertz absorbed the lesson first and loudest; Avis’s 2025 numbers show it wasn’t a one-company problem, and that the economics of renting out an EV fleet are still catching up to the ambitions that built it.