Hertz Global Holdings revealed during its Q3 Earnings Call on Tuesday that it continues to grapple with financial impacts from its significant electric vehicle (EV) purchases. The companyâs investment, including the high-profile acquisition of 100,000 Tesla EVs for $4.2 billion in October 2021, has seen considerable depreciation, driven in part by recent price cuts to Teslaâs lineup.
The 2021 purchase was initially intended to modernize Hertzâs fleet with sustainable powertrains, capitalizing on Teslaâs established presence in the EV industry. However, reductions in Teslaâs vehicle prices subsequently diminished the value of Hertzâs fleet, creating financial strain. Hertz has since initiated large-scale EV sales, including vehicles from Polestar, to mitigate its losses. In January 2024, Hertz made the âstrategic decisionâ to accelerate its EV sales, and by August, it announced plans to sell âtens of thousandsâ of EVs.
By the end of 2024, Hertz aims to sell a total of 30,000 EVs, aligning its fleet size more closely with customer rental demand and reducing excess inventory. The companyâs revised fleet strategy has contributed to substantial financial losses, with Hertz reporting a loss of $0.68 per share in Q3, missing Wall Streetâs anticipated loss of $0.46 per share, according to Bloomberg.
Despite these setbacks, Hertz plans to complete its EV sales by the close of 2025, with the goal of optimizing fleet composition to better balance its vehicle offerings.
