Hertz (NASDAQ: HTZ) reported its earnings for the first quarter of 2024 today, announcing that it is continuing to lose money on its electric vehicle investment and plans to dump even more EVs from its fleet.
Hertz said it had increased the number of EVs it will let go of by 10,000 units, now planning to sell 30,000 of its purchased electric cars this year. In January, it said it would get rid of 20,000 units after it felt $245 million of incremental net depreciation on the value of its EV fleet.
The losses continued in Q1. Hertz said it incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale. However, vehicle depreciation as a whole increased by $588 million, or $339 on a per-unit basis.
$119 of the $339 was related to EVs held for sale.
The announcement in January came as somewhat of a shock to many, as Hertz became the first large-scale rental company to commit to EVs on such a massive scale.
In October 2021, Hertz said it intended to buy $4.2 billion in Tesla EVs from the company. It then expanded to Polestar and other manufacturers. It also spent millions on advertising for the move, calling on stars like Tom Brady to make the announcement widespread.
It did not go as expected.
Hertz lost millions due to the price changes that Tesla made throughout 2023. Additionally, higher-than-expected maintenance costs put pressure on margins.
Stephen Scherr, who was CEO when Hertz bought EVs from Tesla, said in October 2023, “We have an opportunity to buy these cars now at roughly a third less than where we bought the initial component of our Teslas. We’re ultimately better buyers at a falling price, and the margin composition on those cars will be better.”
Scherr stepped down from his role as CEO in March.
For the quarter, Hertz reported a net income loss of $392 million, compared to $126 million last year during the same period. It lost $1.28 per share, nearly three times what analysts expected, according to Bloomberg.
Hertz shares were down over 24 percent at 10:25 a.m. EDT.
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