Hertz began the sale of 20,000 EVs last month, a disposal that is slated to proceed throughout 2024. This divestment was disclosed in a recent regulatory filing where the company also noted an expected non-cash charge of around $245 million for the fourth quarter, attributed to increased net depreciation expenses.
https://www.thegatewaypundit.com/2024/01/you-cant-make-this-up-car-rental-giant
In 2021, the company made headlines by ordering 100,000 vehicles from Tesla Inc., signaling strong confidence in the burgeoning EV market. However, the reality has proven less optimistic. EV sales, which saw a mere 1.3% increase in the last quarter of 2023, have been hampered by high prices and rising interest rates.
“The elevated costs associated with EVs persisted,” stated Hertz CEO Stephen Scherr. “Efforts to wrestle it down proved to be more challenging than anticipated.”
In the wake of the announcement, Hertz’s stock took a hit, dropping 4.3% to $8.95 in morning trading in New York, reflecting a continuing decline after a 32% fall in the previous year, according to Bloomberg.
The company’s strategic shift includes a more cautious approach to acquiring EVs. Hertz’s existing agreements to purchase175,000 EVs from General Motors Co. and 65,000 from Polestarover the coming years may now face delays. Funds from the EV sale will be reallocated to procure gas-powered vehicles, in an effort to “better balance supply against expected demand.”