In 2021, Hertz made a bet: it would purchase a fleet of 100,000 Teslas, positioning itself as the premier destination for eco-conscious renters.
The company even hired Tom Brady to anchor the ad campaign (though you have to wonder if Jalen Hurts was the runner-up).
Hertz stock jumped roughly 10% to 11% intraday, trading up to around $27 to $28 per share. The ripple effect was even bigger for Tesla - its stock surged over 12% in a single day, pushing Tesla's market value past $1 trillion for the first time ever.
[unfortunately…]
Rental car business models depend heavily on one thing: predictable resale value. Hertz bought its massive initial batch of Tesla Model 3s and Model Ys in 2021 and 2022, near the absolute peak of the EV market, and the cars sat on the books carrying that high value.
Tesla’s aggressive price cuts on new vehicles - some by as much as 20% in early 2023 - triggered a sharp decline in used EV values. As a result, Hertz was forced to record substantial non-cash depreciation charges as the market value of its fleet fell dramatically below its original purchase cost.
It wasn't just a pricing problem - it was an operational one too. Many rental customers had never driven an EV before, resulting in frequent collisions. Hertz executives reported that collision and damage repairs for their EVs were running roughly double the cost of a standard gas-powered vehicle, keeping cars off the road and driving up operating expenses.
The damage came to a head in January 2024, when Hertz officially announced it was initiating a fire sale to dump 20,000 EVs. By the end of 2024, that number had expanded to 30,000 units, cementing billions of dollars in total losses for the company. Hertz stock, once riding the euphoria of $29 a share, would go on to hit an intraday low of just $3.45 on March 26th, 2025.
Present Day
Today, the company's 500,000-car fleet competes in a different macro climate.
The key shift is policy-driven, with automotive tariffs now heavily anchored in Section 232 of the Trade Expansion Act of 1962. According to Cox Automotive, this legislative authority "is where the real impact sits, particularly around steel, aluminum, and imported vehicles." These 15% duties on cars built in Europe, South Korea, and Japan are currently in force - though each has already weathered at least one threat of being raised back to 25%, and legal experts suspect the White House could lean on this same Section 232 authority to revisit tariffs elsewhere.
With new car prices climbing under these Section 232 tariffs, Hertz's 500,000-vehicle fleet is transforming from a balance-sheet burden into a valuable source of scarcity. The company is sitting on cars it already owns at pre-tariff cost, while rivals and retail buyers face higher prices to add new inventory. Backed by a structural management shakeup and Pershing Square’s nearly 20% stake driving the turnaround, Hertz’s value proposition has quietly re-emerged - not as an EV pioneer, but as a potential structural hedge against global policy uncertainty.