Car rental company Hertz Global Holdings HTZ is now looking to remove 30,000 electric vehicles from its fleet, significantly higher than the number announced earlier this year.
What Happened: Earlier this year, Hertz announced that it is looking to reduce its EV fleet by 20,000 units through 2024, citing high repair costs as the driving factor. However, at the company’s first-quarter earnings call on Thursday, company COO Justin Keppy said that it has increased the EV disposal plan by another 10,000 units.
As of the end of the first quarter, the company had already sold about 10,000 EVs, he said, on which it incurred vehicle depreciation costs of $195 million.
“Upon completion, we anticipate that the remaining EV fleet will be better aligned with attractive demand for EVs with a priority on our rideshare business,” Keppy said.
The decision to further reduce EVs within the fleet will help it align better with demand and lower operating costs, Keppy said. The company expects to see the benefits of reducing EVs from the fleet in the second half and for EVs deployed outside of rideshare to comprise just about 5% of its global fleet as of the end of 2024.
Why It Matters: Hertz on Thursday reported an adjusted loss of $1.28 per share, much higher than the analyst consensus estimate of a loss of 44 cents.
"Fleet and direct operating costs weighed on this quarter's performance," said CEO Gil West. "We're tackling both issues – getting to the right supply of vehicles at an acceptable capital cost while at the same time driving productivity up and operating costs down."
Price Action: Hertz stock closed down 19.3% at $4.68 per share, according to data from Benzinga Pro. The stock is down 54.1% year-to-date.
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