Hertz Slashes 20K EVs From Fleet, CEO Says Company Facing Reality Of Tesla Price Cuts, Depreciation, Repair Costs... And Demand?
Portfolio Pulse from Adam Eckert
Hertz Global Holdings Inc plans to reduce its global EV fleet by one-third, selling about 20,000 EVs to purchase more ICE vehicles in response to customer demand, lower margins, and higher damage costs associated with EVs. The decision follows Tesla's price cuts, which led to increased depreciation costs for Hertz. Despite the reduction, Hertz's collaboration with Uber remains successful, and the company expects the fleet adjustment to be a net positive.
January 11, 2024 | 7:44 pm
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NEGATIVE IMPACT
Hertz is reducing its EV fleet by selling 20,000 vehicles due to lower demand, higher costs, and depreciation. The company is shifting towards ICE vehicles to meet customer needs.
The reduction in Hertz's EV fleet and the pivot back to ICE vehicles indicate a strategic shift that may concern investors about the company's future in the EV market. The immediate stock price drop reflects negative investor sentiment.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
Tesla's price cuts have led to increased depreciation costs for Hertz, influencing the decision to reduce its EV fleet.
Tesla's price cuts have a direct impact on the residual value of its vehicles in Hertz's fleet, leading to higher depreciation costs for Hertz. This could potentially affect Tesla's reputation as a partner for rental fleets.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70
POSITIVE IMPACT
Hertz's collaboration with Uber remains successful, with healthy demand for both EV and ICE vehicles from the partnership.
Hertz's successful collaboration with Uber, which includes demand for both EV and ICE vehicles, suggests a positive outlook for Uber in terms of vehicle supply diversity and partnership strength.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50