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18 June, 2024

Sixt pumps the bakes on Tesla as it halts purchases and sells existing EV stock

The rental giant responds to Tesla's price drops by prioritizing quality, repair costs, and residual values in its EV fleet strategy


In a strategic move that underscores the evolving dynamics in the electric vehicle (EV) landscape, Sixt, a prominent German rental car company, has decided to discontinue purchasing Tesla vehicles and plans to sell off its current Tesla EV stock. This decision follows closely on the heels of Hertz's announcement of a slowdown in Tesla acquisitions, signaling a nuanced response from the rental industry to Tesla's recent price drops.

Sixt's choice to halt Tesla purchases is directly attributed to concerns surrounding quality, collision repair costs, and the plummeting residual values of its existing Tesla fleet. According to a Bloomberg report, the rental giant has incurred significant losses in its EV rental program this year, primarily due to the adverse impact of diminishing residual values on its held inventory of Tesla cars.

Unlike Hertz, which is taking a step back from electric cars altogether, Sixt is specifically targeting Tesla while simultaneously expanding its electric fleet. The company has set an ambitious goal of transitioning at least 90% of its entire fleet to electric vehicles by the end of this decade. However, the decision to sever ties with Tesla reflects a demand for improvements in quality and financial considerations, particularly addressing collision repair costs and residual values.

As Sixt navigates its way through the transition to a predominantly electric fleet, the second-largest rental fleet in Europe (and fourth-largest in the U.S.) underlines the significance of automaker performance in shaping the future landscape of the rental car industry. The move not only highlights the challenges EV manufacturers may face but also underscores the critical importance of factors like quality and financial viability in determining the success of such strategic transitions.


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