Hertz to sell 20,000 EVs in a shift back to gasoline-powered cars

Hertz Global Holdings Inc. has announced plans to sell one-third of its U.S. electric vehicle (EV) fleet, totaling 20,000 EVs, and reinvest in gas-powered cars due to weak demand for battery-powered options. The sales, initiated last month, are expected to continue throughout 2024. Hertz anticipates recording a non-cash charge of $245 million in its fourth-quarter results, reflecting incremental net depreciation expenses related to the EV fleet reduction. The rental giant aims to use a portion of the proceeds from the EV sales to purchase internal combustion engine vehicles, aligning with customer demand and seeking to achieve a better balance between supply and expected EV demand. Hertz CEO Stephen Scherr highlighted higher repair costs associated with EVs as a factor impacting the company’s bottom line. He suggested that the transition to EVs would be slower than initially expected.

Hertz’s decision to scale back on EVs underscores a significant shift in strategy, as EVs previously constituted 11% of its total fleet, with Teslas representing 80% of that segment. The company had initially committed to purchasing up to 65,000 EVs from Polestar over five years and had placed an order for 100,000 Teslas by the end of 2022. Moving away from EVs reflects a broader trend in the U.S., where EV sales slowed sharply in 2023, with only a 1.3% increase in the final quarter. Hertz’s shift highlights the challenges and considerations companies face as they navigate the evolving electric mobility landscape amid fluctuating market demands and operational considerations.

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