Hertz Global Holdings Inc. said Thursday it is selling about 20,000 electric vehicles from its fleet, or about one-third of the total, and expects to book charges of about $245 million in the fourth quarter. The stock fell almost 5% in early trade.
The move is aimed at better balancing supply and expected demand for EVs, allowing the car-rental company to scrap a disproportionate number of lower-margin rentals and reduce damage expense associated with EVs. Collision and damages costs for EVs remained high in the fourth quarter, Hertz said in a regulatory filing. The charge is on top of the depreciation costs it expects to record in the quarter in the ordinary course of managing its fleet. The news is the latest bad news on EVs, with softer-than-expected demand leading many original equipment manufacturers to scale back plans. In October, Ford Motor Co.
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Ford reported lower-than-expected quarterly earnings, which included an adjusted loss of $1.3 billion for its EV unit, which was wider than Wall Street expected. Ford said that customers interested in EVs were “unwilling” to pay the vehicles’ premium prices, and the company paused billions of long-term investment in EVs due to that disconnect. Hertz will continue to offer EVs, but will implement measures to boost profitability, including by expanding infrastructure such as charging stations, growing relationships with EV makers, particularly related to more affordable access to parts and labor, the company said. “Going forward, the company will continue to actively manage the total size of its EV fleet, as well as the allocation of EVs among customer segments, including leisure, corporate, government and rideshare,” said the filing. Hertz will reinvest in additional internal combustion engine vehicles and expects to improve adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization across 2024, as vehicles are rotated, and in 2025, by which time all in the plan will have been sold. “It is expec …
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The move is aimed at better balancing supply and expected demand for EVs, allowing the car-rental company to scrap a disproportionate number of lower-margin rentals and reduce damage expense associated with EVs. Collision and damages costs for EVs remained high in the fourth quarter, Hertz said in a regulatory filing. The charge is on top of the depreciation costs it expects to record in the quarter in the ordinary course of managing its fleet. The news is the latest bad news on EVs, with softer-than-expected demand leading many original equipment manufacturers to scale back plans. In October, Ford Motor Co.
F,
-0.08%
Ford reported lower-than-expected quarterly earnings, which included an adjusted loss of $1.3 billion for its EV unit, which was wider than Wall Street expected. Ford said that customers interested in EVs were “unwilling” to pay the vehicles’ premium prices, and the company paused billions of long-term investment in EVs due to that disconnect. Hertz will continue to offer EVs, but will implement measures to boost profitability, including by expanding infrastructure such as charging stations, growing relationships with EV makers, particularly related to more affordable access to parts and labor, the company said. “Going forward, the company will continue to actively manage the total size of its EV fleet, as well as the allocation of EVs among customer segments, including leisure, corporate, government and rideshare,” said the filing. Hertz will reinvest in additional internal combustion engine vehicles and expects to improve adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization across 2024, as vehicles are rotated, and in 2025, by which time all in the plan will have been sold. “It is expec …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]