(Bloomberg) -- Stellantis NV will supply as many as 250,000 vehicles to Sixt SE in a deal struck within weeks of Europe’s biggest car-rental company dropping Tesla Inc. vehicles from its fleet. 

First deliveries as part of the multi-billion euro order will start this quarter with a mix of combustion-engine, plug-in hybrid and electric cars to supply Sixt’s rental fleet across Europe and North America over the next three years, the companies said Tuesday. 

Read more: Hertz’s Tesla Fire Sale Portends an EV Reckoning: Hyperdrive

Car rental companies are re-jigging plans for EVs in their fleets as demand slows and price cuts hurt residual values. Sixt in December said it’ll phase out Teslas because the manufacturer’s heavy price cuts undermined prices for used cars, a key source of revenue for the renter which operated just under 190,000 rental vehicles as of the third quarter. Higher repair costs compared to combustion vehicles have also compounded the issues, the company said then.

Rental giant Hertz Global Holding Inc. this month followed with a plan to unload a third of its US electric vehicle fleet because of poor demand, and also citing high repair costs. The move has depressed the resale value to a Tesla Model 3 to less than $18,000, with the drag on used EV prices set to hurt other carmakers, leasing companies and private sellers. 

Read more: Weak Demand for Used EVs Is Making New Ones Tougher to Sell Too

Sixt still plans to electrify as much as 90% of its vehicles in Europe by the end of the decade. In 2022, the company also signed a deal with BYD Co. Ltd. to buy up to 100,000 EVs from the Chinese car manufacturer until 2028. 

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