On Thursday, Hertz Global experienced its biggest one-day percentage drop of 24% in shares. This occurred after the company reported a larger than anticipated quarterly loss, indicating difficulties in its electric vehicle rental business. In response to weak demand, the company announced plans to streamline its operations by selling 10,000 more electric vehicles, bringing total planned sales for the year to 300,000. Additionally, higher repair costs added pressure to the company’s financial performance.
Hertz based in Esther, Florida disclosed that it incurred $588 million in vehicle depreciation charges 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 above Wall Street’s expected loss of 44 cents per share.
The disappointing results of Hertz led Avis Budget Group to also experience a drop in their shares by 7%. Both companies have seen their market value decrease by around 50% this year. The challenging economic conditions facing these rental companies in the electric vehicle market highlight the transportation industry’s broader struggles to adapt to changes in consumer demand and operating costs.