On Thursday, Hertz Global experienced a 24% decline in stock prices, marking the company’s sharpest one-day percentage fall in history. The drop came after Hertz reported a quarterly loss that was wider than expected, highlighting the challenges faced by the company in its EV rental business.
As a result of weak demand, Hertz is streamlining its operations and plans to sell 10,000 more EVs this year, bringing the total planned sales to 300,000. However, the company also faced higher repair costs during the quarter, which added to its fleet maintenance expenses.
Hertz recorded a $588 million hit in vehicle depreciation costs during the quarter, with $195 million attributed to EVs held for sale. According to CEO Gil West, fleet and direct operating costs were key factors impacting the company’s performance in the quarter. Excluding certain items, Hertz reported a loss of $1.28 per share, significantly higher than Wall Street’s expected loss of 44 cents per share.
The disappointing news led to a 7% drop in shares for peer company Avis Budget Group and marked a significant decrease in both companies’ market value since the beginning of the year. These challenges underscored by ongoing struggles faced by companies in the rental car industry as they navigate changing market dynamics and operational costs.
