Hertz Global’s shares plummeted 24% on Thursday, marking their biggest one-day percentage drop in the company’s history. The decline came after Hertz announced a larger-than-expected quarterly loss, which underscores its difficulties in the EV rental business. To address weak demand, the company announced plans to streamline its operations, including selling 10,000 more EVs, bringing the total planned sales for the year to 300,000.
Hertz’s financial performance was also affected by higher repair costs that contributed to increased fleet maintenance expenses. During the quarter, Hertz incurred a $588 million expense in vehicle depreciation costs, 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 higher than the expected loss of 44 cents per share on Wall Street.
Peer Avis Budget Group also saw a 7% decrease in its shares as a result of Hertz’s disappointing results. Both companies have seen their market value drop by around 50% this year due to challenging economic conditions faced by rental companies in the EV market. The transportation industry is struggling to adapt to changes in consumer demand and operating expenses as it navigates this new landscape.
In conclusion, Hertz Global’s shares plummeted on Thursday after reporting a larger-than-expected quarterly loss and announcing plans to streamline its operations due to weak demand. The company’s financial performance was also affected by higher repair costs that contributed to increased fleet maintenance expenses. Peer Avis Budget Group also saw a decline in its shares as a result of Hertz’s disappointing results due to challenging economic conditions faced by rental companies in the EV market.