General Discussions, page-28068

The Hertz sell-off is not understood by many. Yes, the high repair costs they stated are clearly a valid issue. However, the less understood problem is the depreciation impact. Hertz didn't anticipate Tesla's prices to drop significantly in the two years since they acquired them. As the prices have fallen, Hertz needs to revalue the Teslas on their balance sheet. With reduced resale value, Hertz must depreciate the vehicles more to align the book value to the market value more accurately, resulting in a greater loss. Ultimately resulting in a loss in their profit and loss statement. Repair costs will decrease over time too with rising demand and sales.