- Hertz completed its plan to sell 30,000 EVs by late 2024, incurring substantial financial losses.
- The rental company admits its previous strategy to buy tens of thousands of EVs was flawed.
- In total, Hertz faced a staggering $2.9 billion loss throughout 2024, adding to its struggles.
Hertz made headlines in October of 2021 when news broke that it was buying 100,000 Teslas worth $4.2 billion at the time, chiefly Model 3 sedans. Now, just a few years later, it’s clear to the rental company that it made a poor decision. At an earnings call on Thursday, it detailed the situation that contributed its part to the rental company losing $2.9 billion in 2024. It ultimately lost $1.18 per share, which was dramatically more than analysts expected.
“Our focus in 2024 was stabilizing the business and implementing fundamental changes to transform our company,” said Gil West, Hertz CEO. “With our new leadership team and organizational structure in place, we are well positioned to execute our strategy with rigor and at pace.” That strategy included selling off some 30,000 EVs, a plan it began implementing in 2023 and finished in the last quarter of 2024.
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Despite those sales, Hertz says it has a GAAP net loss of $479 million in the fourth quarter. What’s even more shocking about that is that it could’ve been even worse. In 2023, the brand posted $245 million worth of losses attributed to the EV sell-off. It didn’t recur that same loss for 2024. But why did the plan to shift toward EVs fail?
Electric vehicles are often far cheaper to run than their gas-powered counterparts, but only when they’re actually in use. According to MarketWatch, “EVs are not popular with car renters given the limited network of charging stations across the U.S.” To that end, rental cars that sit idle in the parking lot do nothing but cost the rental car company itself more cash.
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We recently spoke with Hertz, and they clarified that they’re not abandoning EVs entirely. Instead, they’re adjusting their fleet based on demand, moving more electric cars to regions with higher adoption rates and better charging infrastructure, such as California, where EV use is significantly more widespread.
For now, West believes that the brand is in position to turn the tide. Despite that, the market is less confident. Hertz shares were down some 11 percent after the earnings report came out. As the day has progressed, it’s jumped back up a touch but is still down some 8.4 percent as of this writing.
