On Thursday, Hertz Global’s stock price dropped by 24%, marking their biggest one-day percentage decline in history. The company announced that they would be selling an additional 10,000 electric vehicles (EVs), bringing their total planned sales for the year to 300,000. This move was made due to weak demand and higher repair costs that added pressure to the company’s financial performance.
Hertz, based in Estero, Florida, reported a $588 million expense in vehicle depreciation costs during the quarter, with $195 million related to EVs held for sale. New 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.
The disappointing results from Hertz caused peer Avis Budget Group to see a decrease of 7% in their shares as well. Both companies have experienced a drop in market value of around 50% this year due to challenging economic conditions faced by rental companies in the EV market. These struggles underscore the broader challenges faced by the transportation industry as it adapts to changes in consumer demand and operating expenses.