Hertz car rentals will sell even more electric vehicles to limit losses
Hertz Global Holdings Inc has increased the number of electric vehicles it plans to sell this year as it cuts its electric vehicle fleet to reduce losses that have weighed on the car rental giant's earnings.
In the first quarter, Hertz increased its EV sales plan by 10,000 vehicles , for a total of 30,000 EVs scheduled for sale in 2024. The majority of these EVs will be Teslas.
The company took a $195 million vehicle depreciation charge to write down to fair value held-for-sale electric vehicles that remained in inventory at the end of the quarter and recognize retirement losses on electric vehicles sold in the period, Hertz said in a statement Thursday.
Vehicle depreciation in the first quarter of 2024 increased by $588 million, or $339 per unit. Of the $339 per unit increase, $119 was related to electric vehicles earmarked for sale, the company said.
Hertz reported a much wider loss for the first quarter than analysts expected. Adjusted net loss was $392 million, representing $1.28 diluted loss per share.
This compares with analysts' consensus estimate of a loss of $0.45 per share, and shows that the company is much more fragile than previously thought.
Following its earnings release on Thursday, Hertz shares fell 21% on the NASDAQ as of 10.03am. Oa the loss was reduced to 19%, however a significant drop visible in the graph below
Hertz was one of the first companies to purchase electric vehicles to rent to customers, but recently began selling previously purchased electric vehicles due to weakening customer demand for electric vehicle rentals. This company, unlike its competitors, has a riskier approach because it entirely owns all the EVs and therefore loses directly on any capital loss linked to sales.
Earlier this year, Hertz said in a regulatory filing with the SEC that it is selling about a third of its electric vehicle fleet, highlighting the risk of its "first-mover" strategy when it comes to EVs.
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The article Hertz car rentals will sell even more electric vehicles to limit losses comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/hertz-autonoleggi-vendera-ancora-piu-veicoli-elettrici-per-limitare-le-perdite/ on Fri, 26 Apr 2024 06:00:41 +0000.