Due to weak demand for electric vehicles and high maintenance costs, Hertz Global Holdings, Inc., a US-based car rental company, has decided to switch back to using gasoline-powered cars.
According to the filing submitted to the US Securities and Exchange Commission on Thursday, January 11th, Hertz Global Holdings, Inc. plans to sell 20,000 electric vehicles, with sales starting last month and continuing throughout 2024. As a result of the vehicle sales, the company will record approximately $245 million in non-cash expenses related to incremental net depreciation costs in its fourth-quarter earnings report.
In the aforementioned filing, Hertz Global Holdings, Inc. revealed that the costs associated with collisions and damages to electric vehicles remained high in the fourth quarter. The company's CEO, Stephen Scherr, stated that the costs associated with electric vehicles have remained elevated, and efforts to address this issue have proven to be more challenging than anticipated.
According to the official website of Hertz Global Holdings, Inc., the company has over 8,100 rental locations, with a presence in 148 countries worldwide. The aforementioned sales by Hertz Global Holdings, Inc. account for approximately one-third of the company's electric vehicle fleet in the US market. A review of Hertz Global Holdings, Inc.'s used car website by Wall Street News revealed that there are currently 704 electric vehicles available for sale, including models such as Tesla's Model 3 and Model Y, BMW's i3, and Chevrolet's Bolt.
The large-scale sale of electric vehicles signifies a shift in Hertz Global Holdings, Inc.'s multi-year transition towards new energy vehicles. In 2021, Hertz Global Holdings, Inc. placed an order for 100,000 electric vehicles from Tesla, and in 2022, the company announced the purchase of up to 6,500 vehicles from Polestar, a Swedish electric vehicle company jointly established by Geely and Volvo. Previously, Hertz Global Holdings, Inc. had set a target for a quarter of its fleet to be electric vehicles by the end of 2024.
The media believes that Hertz Global Holdings, Inc.'s dramatic shift highlights the declining demand for electric vehicles in the US market.
Cox Automotive, an automotive research firm, cited data from professional automotive evaluation firm Kelley Blue Book on Tuesday, stating that electric vehicle sales in the United States only grew by 1.3% on a month-on-month basis in the fourth quarter of 2023, indicating a significant slowdown in growth momentum. Sales in the second and third quarters increased by 15% and 5% respectively.
Following the disclosure of Hertz Global Holdings, Inc.'s plan to sell electric vehicles, the company's stock price (HTZ) continued to decline on Thursday, with an initial drop of approximately 6.5% and a narrowing of the decline to within 4% during midday trading. Tesla also opened lower and experienced a decline of nearly 3.7% during early trading.
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Hertz Global Holdings, Inc. ordered 100,000 vehicles from Tesla in 2021. This sale includes 20,000 vehicles, including Tesla and Y, accounting for one-third of its total electric vehicle fleet in the United States. Hertz Global Holdings, Inc. fell more than 6% during Thursday's trading session.

Unable to bear high costs, rental car giant Hertz Global Holdings, Inc. plans to sell 20,000 electric vehicles and switch back to gasoline cars.