While reporting its Q1 2024 financial results April 25, Hertz announced it will sell off 10,000 more electric vehicles from its fleet than originally reported -- a total of 30,000, following significant depreciation charges.
Hertz initially announced in late 2021 it was buying 100,000 Tesla Model 3s. Then, after reporting record earnings for 2022, the company announced in early 2023 it was increasing its investment in EVs, with plans to order 175,000 from General Motors and 65,000 from Polestar.
However, the depreciation of Hertz's EVs has been exacerbated by a price war initiated by Tesla. In January, Hertz announced it would sell off 20,000 EVs from its rental fleet -- about a third of the total it had purchased -- due in part to high collision repair and logistics costs. A month later, it announced it was pausing purchasing more EVs from Polestar.
The losses continued into the first quarter of 2024. Hertz said it incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale.
The news of this accelerated selloff follows a distressing financial disclosure: Hertz reported a net income loss of $392 million for the quarter, a substantial increase from the $126 million loss recorded during the same period last year. The loss per share deepened to $1.28, almost tripling what financial analysts had projected.
The EV missteps also led to a change in leadership at Hertz. In March, it announced it was replacing CEO Stephen Scherr with Gil West, the former COO of Delta Air Lines and GM's Cruise unit.
