Posted on 01/11/2024 5:09:37 PM PST by Red Badger
Hertz Global Holdings Inc. plans to sell a third of its United States electric vehicle fleet and reinvest in gas-powered cars due to weak demand and high repair costs for its battery-powered options.
The sales of 20,000 EVs began last month and will continue over the course of 2024, the rental giant said Jan. 11 in a regulatory filing. Hertz will record a non-cash charge in its fourth-quarter results of about $245 million related to incremental net depreciation expense.
Article content Article content The dramatic about-face, after Hertz announced plans in 2021 to buy 100,000 Tesla Inc. vehicles, underscores the waning demand for all-electric cars in the U.S. EV sales growth slowed sharply over the course of 2023, rising just 1.3 per cent in the final quarter as consumers were put off by high costs and interest rates.
“The elevated costs associated with EVs persisted,” Hertz chief executive Stephen Scherr said. “Efforts to wrestle it down proved to be more challenging.”
Hertz’s shares fell 4.3 per cent to US$8.95 as of 10:01 a.m. in New York. The stock declined 32 per cent last year.
Going forward, Hertz will keep a close eye on EV demand both at dealerships and within its own operations to decide whether the company should buy more vehicles, Scherr said. That means its agreement to buy 175,000 EVs from General Motors Co. over the next four years and another 65,000 from Polestar may take much longer to complete, he said.
Hertz plans to use some of the money raised by selling off EVs to buy gas-powered vehicles. “The company expects this action to better balance supply against expected demand of EVs,” it said in the filing.
The shift back to more conventional cars marks a reversal of a strategy centred on EVs, which the company hoped would fetch higher prices at the counter and hold their value. Tesla’s price cuts over the past year lowered the value of the cars in Hertz’s fleet and with EV sales growth slowing, it’s not clear if consumers will have an appetite for them in the used-car market.
Hertz is keen on GM’s plan to sell cheaper EVs, like a future redesign of the Chevolet Bolt, which sold for under US$30,000 before ending production last year, and a US$35,000 Chevy Equinox that is going into production. Those vehicles could be easier to rent profitably, Scherr said.
“We’re committed to the strategy,” Scherr said. “It will take more time to execute it.”
Earnings boost The plan to unload EVs should improve Hertz’s cash flow and earnings this year and next. By year-end 2025, the company expects improved financial results driven by higher revenue per day and lower depreciation and operating expenses. The company sees incremental free cash flow of as much as US$300 million in the aggregate over 2024 and 2025.
Article content Scherr had signalled this shift would come, saying in October that the company would scale back on EVs, which had made up 11 per cent of its total fleet. Teslas represented 80 per cent of that.
What do they expect to get for these turkeys when they attempt to sell them? No matter how cheaply they go for, they will be no bargain.
Who will buy them?
Why the hell is it so hard for them to simply say that virtually NO ONE WANTS TO DRIVE the damn things...for many, many, reasons.
Who would buy a used battery EV? How would you know what you were getting? Even if you really wanted an EV, you would buy a new one right? Hertz needs to have a “fire sale!”
I guess that scrap-metal companies could buy them, but leave the batteries behind.
The Regime is totally invested in EVs.
And Regime loyalists like the corporate managers of Hertz have to go along or lose their positions - regardless of corporate losses.
What else can we expect. They are liberals after all and liberals have never been very good accepting and dealing with reality when it gets in the way of their utopian fantasies.
Nobody ever went broke underestimating the intelligence of the public.
-somebody said that sometime
The cost of pushing technology not yet in its prime into mass production vs. R&D instead.
Electric cars may have indeed become a fully viable option...but the power that be actually pushed that back by many years - perhaps very many years.
I don't want one even if the government gave it to me for free. What would I do with it?
H. L. Menken..............
[Who would buy a used battery EV? How would you know what you were getting?]
BEFORE YOU BUY AN EV, DO SOME RESEARCH ON TIRE WEAR!
“What would I do with it?”
That would also be my question if someone offered to give me one. We live in a cold climate in the middle of nowhere. Shopping and doctoring is 90 miles away. There’s no way in hell I’d get in one of those things when it’s below zero and have to make a 90 mile drive. I’m not suicidal.
Come out of bankruptcy and buy 100,000 Teslas because everyone wants to rent an EV while on vacation or on business. Boy, these business schools are pumping out some real geniuses.
Idiots
https://youtu.be/dr3mFzh0KSk
Selling EVs nobody but tom brady wanted? Maintenance too costly? Replace a battery on a used one won’t matter on price.
My local mexi tire shop owner said he ordered a shipping container of Mickeylin Tesla tires direct from china that he is expecting next month. He said the sidewalls have Mickey steering a steamboat and he got them for $45 each
He said Tesla owners will pay 200 each and with taxes fees mounting etc. $1200
Guest I heard on local radio said he had to travel maybe 200 miles to another city to appear on their show and then back to the airport. He said all the available rental cars were EVs——no choice. Either drive one or walk.
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