Shares of the Hertz car rental company fell to a record. Parting with Teslas is also to blame

The company said on Thursday that it sold 1.28 US dollars per share, i.e. a total of 392 million US dollars, or about 8.8 billion K. Analysts expected a loss of no more than 44 cents per share. The company also had to raise 195 million dollars for the depreciation of another 10,000 electric cars, which Hertz is now offering for sale. The information was brought by the Bloomberg agency.

Although the company has met the expectations in the area of ​​needs, it is trying to quickly work on its failed plan for electric cars, which led to them with rental rates and replacement costs.

The company’s shares fell by 23 percent on Friday morning in New York, the largest one-day decline in the history of the company. Their price fell to a record low of 4.48 US dollars, and this year they have written off by 200 percent.

Wrong step

Hertz ordered 100,000 Tesla cars in January 2021 in the hope that car prices will stabilize and Germans will want to buy them. The opposite happened. The company’s general editor at the time, Stephen Scherr, was responsible for the move. After he found out that this was not going to happen, he resigned last month.

The task of the new general editor, Gil West, is to adjust the company’s fleet to the right number of electric cars and thus cut the costs that electric mobility has put on the company’s profits. Electric cars have the same repair costs as traditional gasoline-powered cars, their value has fallen after Tesla keeps reducing their price. The sale of the unnecessary electric vehicle fleet should end in 2025.

Just a few days ago, West outlined his priorities, which should move the company on the right path. All of them involved rolling up their sleeves and improving the company’s main activities, and it is about an improved experience at Pepek pjoven or a better Hertz car with the rental and used car market.

The year 2024 is a turning point for us. Our quarterly results are unacceptable, said West. In this quarter, the company had to close 125 of its branches, many of which were unworkable because they were out of business. West wants to focus on the small details of the business, for example, how the company buys spare parts and how quickly it prepares vehicles for the next rental when it is reeling from orders.

There are problems elsewhere

The dealership said its monthly depreciation expense came to $592 (K13,300) per vehicle, which is unusually high in the rental area. This is partly due to the fact that the prices of used vehicles in the comparable period of last year, when the company spent on some sales, increased significantly.

Another problem for the company is the cost of repairing cars after accidents. The company’s vehicle operating expenses rose ten percent to $1.4 billion (K31.6 billion). If not for accidents and repairs, they would have remained the same, the company said.

In addition to problems with electric cars, Hertz’s performance has fallen in other areas as well. Daily sales fell seven percent to $56.68 and vehicle utilization fell slightly to 76 percent. Automatic transmissions are stupid when they are 80 percent or you.

Gil West, who will step down as Hertz’s top job on April 1, was recently the operating editor of General Motors’ Cruise robot taxi unit. Pedtm left the same role at Delta Air Lines, Bloomberg reported.