On Thursday, shares of Hertz Global plummeted 24%, marking their largest one-day percentage drop on record. This decline came after the company reported a larger-than-expected quarterly loss, which highlighted its difficulties in the EV rental business. In response to the weak demand, Hertz announced plans to streamline its operations, including the sale of 10,000 more EVs, bringing the total planned sales for the year to 300,000. Additionally, higher repair costs contributed to the company’s increased fleet maintenance expenses, putting additional pressure on its financial performance.
Hertz, headquartered in Estero, Florida, disclosed that it incurred a $588 million expense in vehicle depreciation costs during the quarter, with $195 million related to EVs held for sale. Newly appointed CEO Gil West attributed the weak quarterly performance to fleet and direct operating costs. Excluding certain items, the company reported a loss of $1.28 per share, significantly higher than the expected loss of 44 cents per share on Wall Street.
The disappointing results of Hertz also saw a 7% decrease in peer Avis Budget Group’s shares. Both companies have seen their market value drop by around 50% this year due to challenging economic conditions faced by rental companies in the EV market that underscored broader struggles of transportation industry adapting to changes in consumer demand and operating expenses.
