Hertz offloads 20,000 EVs to buy combustion engine cars
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The news: Car rental company Hertz is selling 20,000 of its electric vehicles in order to purchase more internal combustion engine cars as appetite for traditional models remains high.
The numbers: Equating to almost one third of its global EV fleet, the sale is expected to incur a write-down of USD245 million ($368 million) which will be reflected as a non-cash charge in the company’s Q4 2023 earnings.
The context: In 2021, Hertz ordered 100,000 Tesla electric vehicles in attempts to electrify its fleet. However, weakened customer demand for EVs has prompted the rental company to make a turnaround. In October, CEO Stephen Scherr told CNBC that electric vehicles currently make up 11% of Hertz’ entire fleet, with Tesla accounting for 80% of this EV segment.
An SEC filing from Hertz explains that the company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles, which are more in keeping with customers' current preferences.
Several automakers, such as General Motors and Ford, have announced plans to dial back EV production due to a reduction in consumer demand.
The source: Hertz SEC Regulatory Filing
