News
Rental Company Hertz Has Decided To Part Ways With 10,000 More EVs
Faced with financial losses greater than expected, the rental company Hertz has decided to part with 10,000 more electric cars than expected.
Clearly, at a time when the transition to electric cars is a dilemma for many consumers, at Hertz, it is a nightmare that continues. We remember the time, almost long ago (yet only at the end of 2021), when the American rental company was pleased to have placed a huge order for 100,000 Teslas while its financial results were at their highest. Or even a few months later, Hertz continued its purchases, with 175,000 electric cars from GM here or 65,000 Polestars there. Today, these orders have become his worst nightmare.
Since then, it has been a massacre. These overly ambitious ambitions caused the company’s figures to plummet. So much so that after dismissing the former boss of the brand with a first salvo of 20,000 electric cars resold, the American announced a few days ago that it was selling off 10,000 additional battery-powered vehicles.
Half of the electrics resold
If the figures for electric car purchases by Hertz are dizzying, these are vehicles that were to be purchased gradually over the years following agreements with the manufacturers. And Hertz does not have the 340,000 electric cars announced in its fleet. At the start of 2024, there were only about 60,000. But already enough to weigh down the accounts…
Indeed, even if the turnover of the Estero (Florida) brand is up 2% compared to the first quarter of 2023, the results for the start of 2024 announced on April 25 are not good. The net loss announced by the American rental company amounts to 392 million dollars, the current equivalent of around 364 million euros.
A residual value that poses a problem
How do explain this dive, which is a little bigger than expected? The depreciation of electric vehicles. And Hertz specifies that this item alone represented no less than 195 million dollars in the first quarter of 2023.
With the price war initiated by Tesla, which caused the price of its cars to drop continuously or almost continuously and which forced other manufacturers, as far as possible, to align, the residual value of the cars purchased by Hertz took a big hit. That is added to repair costs, which can also be higher on electric than on thermal, particularly at Tesla, and the accounts have plunged. It now remains to be seen whether Hertz will be able to turn things around as planned by reusing the money from the sale of half of its electric fleet to buy thermal cars. Everything rests on the shoulders of his new boss, Gil West, from General Motors.
