Hertz revealed during its Q3 Earnings Call on Tuesday that it is continuing to get thrashed by the massive electric vehicle purchase it made several years ago as the value of the EV fleet continues to depreciate.
In October 2021, Hertz announced that it had bought 100,000 EVs from Tesla for $4.2 billion. It was the rental service’s attempt at adding sustainable powertrains to its fleet, and it went with Tesla because of the company’s prowess in the industry.
However, massive price cuts to the Tesla lineup brought large-scale losses to Hertz as the value of its fleet was reduced overnight. Since then, the company has been struggling with the effects of its purchase, which also included EVs from Polestar.
Initially, Hertz was doing well due to its EV strategy, but it lost its CEO and decided to begin a fire sale of its electric vehicles in an effort to limit its losses.
In January 2024, Hertz said it had come to a “strategic decision” to begin selling its EVs, attempting to recoup losses and put a bandage over the damage it had already felt.
Hertz reveals aggressive Tesla EV sales plan after lackluster quarter
It continued with this plan in August, as it said it would sell “tens of thousands” of EVs in its fleet to help diminish these losses.
Things have continued, but now it has a goal of how many EVs it wants to have in its fleet by the end of 2024. During the company’s Earnings Call, it said it would likely be finished with the EV sale by the end of 2025.
Hertz still aims to sell 30,000 EVs by the end of 2024, and it aims to have a fleet that will align with how many EVs it rents out to customers, not an overconcentration of the powertrain. This strategy has effectively caused millions in losses over the past few quarters.
This earnings call was not friendly to the company’s financials. It reported a loss of $0.68 per share. Wall Street estimated a loss of $0.46 per share, Bloomberg reported.
You can purchase Hertz EVs through the company’s website here.
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