Tesla’s stock has been under pressure over the last month or two. While it’s easy to point fingers at Elon Musk’s latest antics, there’s another force at play that’s had a major impact on Tesla’s financials: Hertz. Yes, the rental car giant that made a big bet on electric vehicles (EVs) has found itself in a messy situation—one that’s tanking used Tesla prices across the board.
From $70K to $26K: The Tesla Price Plunge
Just two years ago, a used Tesla could easily fetch over $70,000. Fast forward to today, and that same car might sell for as little as $26,000. That’s a price drop that would make even cryptocurrency investors wince. But it’s not because nobody wants a Tesla. Instead, the market is flooded with them, and we have Hertz to thank for that.
The 100,000 Car Gamble
Back in 2021, fresh out of bankruptcy, Hertz made headlines with a bold announcement: they were going all-in on EVs, ordering 100,000 Teslas (with a few Polestars and GMs thrown in for variety). The move was meant to signal a futuristic shift in rental cars, complete with glossy marketing campaigns featuring Tom Brady.
But reality hit hard. By 2023, Hertz realized that just because EVs were trendy didn’t mean people wanted to rent them—especially if they’d never driven one before. Customers were hesitant, and the supposed cost savings didn’t materialize as Hertz had hoped. Then came another rude awakening: Teslas were far more expensive to maintain and repair than traditional gas-powered cars. The big gamble had failed.
The Great Hertz Fire Sale
By mid-2024, Hertz started offloading its Teslas at rock-bottom prices. The company aimed to sell at least 30,000 EVs from its fleet before the year’s end, effectively flooding the used car market. While the initiative wasn’t started under new CEO Gil West, who joined in July 2024, he quickly got on board with the company’s “fleet realignment.”
“We’ve taken the necessary actions to turn the page on the past and set Hertz up for ongoing success,” West stated. Translation: We made a bad bet, and now we’re cutting our losses.
Hertz’s Financial Pain Becomes Tesla Owners’ Pain
By February 2025, Hertz had completed its EV sell-off. On its fourth-quarter earnings call, the company cited “ongoing adjustments to its fleet strategy” as a reason for its financial struggles. Reading between the lines, it’s clear: selling off 30,000 Teslas at steep discounts was a significant hit to the company’s bottom line.
But while Hertz had to take a financial loss, imagine how this felt for individual Tesla owners. Someone who bought a Model 3 in 2022 for $60,000 might now find their car worth less than half that. And if you thought you were getting a deal buying a used Tesla from Hertz, well… surprise! Many of those cars came with damage, software glitches, and other headaches. (See Quartz’s deep dive into the issue.)
A Blip or a Trend?
In the short term, Hertz’s fire sale has undoubtedly put downward pressure on Tesla’s resale values. But does this mean all EVs are doomed to depreciate at breakneck speed? Not necessarily. As infrastructure improves and the market adjusts, EVs may find more stable ground.
For now, though, if you’re trying to sell a Tesla that you bought a few years ago, good luck. And if you’re in the market for a used one, you might find some incredible deals; just be sure to check the fine print.
Final Thoughts: What This Means for Tesla Buyers and Sellers
If you’re looking to buy a Tesla, now might be the best time to snag a deal. But be cautious—some of these ex-rental Teslas may have seen rough use. On the other hand, if you’re trying to sell a Tesla, you might need to adjust your expectations. The used EV market is in flux, and thanks to Hertz, the days of Teslas holding sky-high resale values might be behind us—at least for now.
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2 comments
As a sort of “car guy” I feel like all EVs (not just Tesla) are in a bit of a really weird market right now. It is still very much emerging tech. The consumer is essentially an extension of manufacturer’s R&D. There are some surprises and concerns with maintenance, reliability, repairs etc esp as they age (ex battery pack replacement prices are insane). I would love to have one but right now its still not the sort of technology I could rely on as the only vehicle in a household. Especially living somewhere prone to extreme weather (which is so ironic). Musk aside I feel like Tesla and many other EVs are still a “statement purchase” which is best made when looking at a second car that doesnt need to be relied upon.
Wouldn’t own a Tesla now if you gave it to me. There are better, safer and more responsible EV options out there.