Hertz Global Holdings Inc has raised the number of electric vehicles it plans to sell this year as it is cutting its EV fleet to reduce losses that have weighed on the car rental giant's earnings.
In the first quarter, Hertz upsized its EV disposition plan by 10,000 vehicles, for a total of 30,000 EVs intended for sale in 2024.
The company incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale which were remaining in inventory at quarter-end to fair value and recognize the disposition losses on EVs sold in the period, Hertz said in a statement on Thursday.
Hertz reported a much larger loss for the first quarter than analysts had forecast.
Following the earnings release on Thursday, Hertz's stock crashed by 21% on the NASDAQ as of 10:03 a.m. EDT. Hertz was an early mover in buying EVs to rent to customers, but it and other car rental companies have recently started to sell the EVs they had previously purchased due to weaker customer demand for EV rentals.
Hertz, unlike other rental firms, has a more risky approach because it fully owns all the EVs it has bought and is losing money if the resale value slumps.
Earlier this year, Hertz said in a regulatory filing to the SEC it is selling roughly one-third of its electric vehicle fleet, highlighting the risk of its first-mover strategy when it comes to EVs.
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