In a surprising move, German car rental giant Sixt has decided to discontinue purchases of Tesla electric vehicles (EVs) and sell off its existing fleet of Tesla, citing significant losses on its EV rental program.
This decision comes amid Tesla’s recent significant price cuts, which have pleased individual buyers but raised concerns among fleet purchasers like Sixt.
Navigating Away from Tesla
The company is opting for a different electric direction, favoring Chinese automaker BYD’s more affordable and easier-to-repair electric vehicles.
The move signals a strategic shift for Sixt, which aims to electrify at least 90 percent of its fleet by the decade’s end. Tesla’s recent move to substantially lower retail prices on its electric vehicles has been met with mixed reactions.
While individual customers may see this as an opportunity, fleet buyers like Sixt have expressed concerns about the impact on residual values.
Following Hertz’s decision to slow its Tesla purchases, Sixt has taken a more drastic step by discontinuing Tesla acquisitions and divesting from its existing Tesla fleet.
Reports suggest that Sixt is facing considerable losses on its EV rental program due to the plummeting residual values of its Tesla inventory.
Sixt has decided to move away from Tesla vehicles in response to quality, collision repair costs, and concerns about residual values. The company’s broader strategy involves transitioning its entire fleet from gasoline and diesel-powered cars to electric vehicles.
BYD, a Chinese automaker, has become Sixt’s choice for this transition due to the perceived advantages in cost and repair.
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Sixt Ditching Tesla
Sixt’s commitment to electrify its fleet has led to a strategic partnership with BYD, making it the first rental company to engage with BYD in Europe.
The rental giant plans to purchase at least 100,000 BYD electric cars, signaling a shift toward a more sustainable and cost-effective electric future for its global operations.
This move positions Sixt as a significant player in adopting Chinese electric vehicles in the European market. As Sixt phases out its Tesla fleet, consumers may find an unexpected opportunity in the used Tesla market.
The sell-off of former rental Teslas could reduce prices for those interested in purchasing a used electric vehicle. However, the financial soundness of such a decision remains a topic of debate.
Sixt’s decision to part ways with Tesla and embrace BYD electric vehicles marks a noteworthy development in the competition for dominance in the electric fleet market.
Tesla’s price adjustments have raised concerns among fleet buyers, leading to strategic shifts and alliances with other electric vehicle manufacturers.
The move by Sixt reflects the challenges Tesla faces in the fleet market. It signals a growing interest in more affordable and practical alternatives, such as those offered by Chinese automaker BYD.
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