By Hertz Global Holdings, the car-rental company, has announced plans to sell approximately one-third of its global electric vehicle (EV) fleet due to weaker demand for electrified rentals. The company will use the proceeds from the sale of about 20,000 EVs in the U.S. to purchase internal combustion engine vehicles that align with customer demand.
According to Hertz, this strategic move will help balance supply with anticipated EV demand from customers, while also reducing the number of lower-margin rentals and cutting down on the expenses associated with EV damage. The company is expecting to recognize an incremental net depreciation expense of $245 million in relation to the sale.
Initially, Hertz had set a target to electrify a quarter of its fleet by the end of 2024. However, it has now shifted its focus to matching supply with demand and improving margins. Repair costs and price cuts for Tesla cars have put additional pressures on the company’s electrified fleet.
Despite these changes, Hertz remains committed to offering EVs to its customers. To improve profitability on its remaining fleet, the company plans to expand charging infrastructure and collaborate with EV manufacturers to access more affordable parts.
The completion of the EV sales is expected by 2025. Hertz foresees this move generating higher revenue per day and lower depreciation and operating expenses.
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