Sixt Drops Tesla From Rental Fleets Due To Savage Depreciation – But Retains BYD EVs

–>

Tesla’s Model Y is selling like ice cream in a heat wave in Europe, so you don’t have to look hard on the continent’s roads to see what was once a fairly niche product. But one place you won’t find Teslas going forward is on the menu of the rental agency, Sixt. The firm says it is phasing out the American automaker’s EVs from its fleets because of high costs, including depreciation that’s much worse than for combustion cars.

Sixt recently wrote to customers to inform them that it was not purchasing any new Tesla vehicles for its fleet and would also be disposing of its existing stock of the firm’s EVs. It went on to explain the reasoning behind the decision, stating that the demand for electric mobility is “still clearly below the level of combustion engines,” but suggested that it was the brutal real-world costs of buying and running the EVs that was was the major motivating factor.

Related: Tesla Price Cuts And High Repair Costs Crash Hertz’s EV Expansion Plans

The company told customers that it couldn’t ignore the higher list price and repair costs of electric vehicles, or the steep depreciation, which is resulting in EVs shedding value faster than traditional combustion-engined cars. And Sixt blamed the price war created by Tesla for this situation.

“These [costs] have come under further pressure due to discount campaigns by some manufacturers, particularly clearly in the case of Tesla,” the rental agency wrote. “Overall this leads to significantly higher holding costs for Tesla vehicles, which we must…take into account in our fleet decisions.”

While many car rental companies are believed to have “buy back” schemes in place with automakers, at least according to Focus.de, the German news website reports that Sixt has no such deal with Tesla that could shield it from a drop in the values of its EV fleet. That could be why customers will still be able to rent electric cars from BMW, Peugeot, MG, Nio and BYD though Sixt going forward, but won’t be able to hire a Tesla. Maintaining some kind of EV presence is important if Sixt is to hit its target of making at least 70 percent of its fleet electric by the end if the decade.

Sixt isn’t the only rental company experiencing buyer’s remorse over its Tesla purchases. In October we reported that Hertz was dialling back its EV expansion plans due to higher than expected repair costs and a slump in resale values resulting from Tesla’s big price cuts.