Hertz Sells 30,000 Electric Vehicles, Yet Anticipates $2.9B Loss in 2024 | Carscoops

      The stock of the rental car company is currently down, but it is optimistic about recovering following a challenging 2024.

      Hertz has finalized its initiative to offload 30,000 electric vehicles (EVs) by the end of 2024, which has resulted in significant financial setbacks.

      The rental company acknowledges that its earlier approach of acquiring tens of thousands of EVs was misguided.

      Overall, Hertz suffered an astonishing loss of $2.9 billion throughout 2024, compounding its difficulties.

      Hertz attracted attention in October 2021 when it announced the purchase of 100,000 Teslas for $4.2 billion, primarily Model 3 sedans. Now, just a few years later, the company recognizes that it made a detrimental choice. During an earnings call on Thursday, it outlined the factors that contributed to its $2.9 billion loss in 2024. The company ultimately reported a loss of $1.18 per share, significantly exceeding analysts' expectations.

      “Our priority in 2024 was to stabilize the business and implement essential changes to transform our company,” stated Gil West, Hertz CEO. “With our new leadership team and organizational structure in place, we are positioned well to execute our strategy effectively and swiftly.” This strategy entailed selling 30,000 EVs, a plan initiated in 2023 and completed in the final quarter of 2024.

      Despite those sales, Hertz indicated a GAAP net loss of $479 million in the fourth quarter. Remarkably, the situation could have been worse. In 2023, the company recorded losses of $245 million due to the EV sell-off, but it did not experience that same loss again in 2024. However, why did the shift toward EVs falter?

      Electric vehicles typically have lower operating costs compared to gasoline vehicles, but only when they are actively used. According to MarketWatch, “EVs are not favored by car renters due to the limited availability of charging stations across the U.S.” Consequently, rental cars that remain unused in the parking lots add to the rental company’s expenses.

      We recently spoke with Hertz, and they clarified that they are not completely moving away from EVs. Instead, they are recalibrating their fleet based on demand, reallocating more electric cars to areas with higher adoption rates and better charging networks, such as California, where EV usage is more prevalent.

      For now, West believes the company can turn the situation around. Nonetheless, market confidence is waning, with Hertz shares dropping around 11 percent following the earnings report. As the day progressed, shares have rallied slightly but still remain down approximately 8.4 percent as of this update.