Hertz’s EV Rental Business Struggles: Shares Plummet 24% in Single-Day Percentage Drop, Peer Avis Also Suffers

Hertz Global’s shares plummeted 24% on Thursday, marking their biggest one-day percentage drop on record. This decline came after the company reported a larger-than-expected quarterly loss, underscoring its difficulties in the EV rental business.

In response to Hertz’s disappointing results, peer Avis Budget Group also saw a 7% decrease in its shares. Both Hertz and Avis have seen their market value drop by around 50% this year. The challenging economic conditions faced by these rental companies in the EV market underscore the broader struggles of the transportation industry in adapting to changes in consumer demand and operating expenses.

The company announced plans to streamline its operations due to weak demand, including the sale of 10,000 more EVs, bringing the total planned sales for the year to 300,000. Additionally, higher repair costs contributed to the company’s increased fleet maintenance expenses, adding pressure to its financial performance.

Hertz, headquartered in Estero, Florida, disclosed that it incurred a $588 million expense in vehicle depreciation costs 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 higher than the expected loss of 44 cents per share on Wall Street.