Hertz Reverses Plans to Grow Electric Vehicle Fleet

Hertz, the rental-car company, has seen a 7% decline in shares to $8.32 following its recent announcement to sell approximately one-third of its global electric-vehicle fleet. This decision marks a significant shift from their previous plans to expand their fleet of plug-in models.

The stock, which closed at $8.95 on Thursday, has experienced a drastic 51% decrease over the past year.

In a regulatory filing, Hertz stated that it intends to sell around 20,000 EVs in the United States and utilize the proceeds to acquire internal-combustion-engine vehicles. The company cited weaker demand for electric vehicles and their higher operating costs as the driving factors behind this strategic move.

As a result of the sale of these 20,000 electric vehicles, Hertz expects to incur an incremental net depreciation expense of $245 million. Additionally, they have revised their outlook for the year, attributing part of the adjustment to increased collision and damage expenses, primarily associated with EVs.

Hertz had previously made headlines with its ambitious plan to purchase 100,000 Tesla EVs by 2021. This initiative was seen as a crucial aspect of the company's turnaround story as it sought to offer a broader range of electric choices to its customers.