From Quiver Quantitative:

Hertz plans to sell 20,000 EVs in 2024 due to weak demand and high repair costs. The decision comes amidst a broader slowdown in U.S. EV sales. The company will record a non-cash charge of $245 million in Q4 and has announced a shift back towards gas-powered cars, offloading a third of its U.S. EV fleet. Hertz’s shares dropped 4.3% following the announcement, reflecting investors’ reactions to the shift in strategy.

This reversal could boost Hertz’s free cash flow by $250-300 million in 2024-25, improving corporate EBITDA. Analysts predict this strategic reversal could strategically improve Hertz’s free cash flow by $250-300 million in 2024-25. The market overview and key points underscore the company’s strategy shift, reflecting concerns about cost and practicality shifting investors’ focus to Hertz’s ability to manage the sale of EVs and generate additional cash flow. With concerns about cost and practicality overshadowing initial EV enthusiasm, Hertz’s strategic pivot towards gas-powered vehicles raises questions about the long-term viability of EVs in the rental market, necessitating flexibility in response to changing market dynamics. This strategic shift is part of a broader trend in reshaping the automotive landscape in the U.S. and will be crucial in determining the success of Hertz’s revamped strategy. Hertz plans to invest in gas-powered vehicles by placing its pivot towards gas-powered vehicles and invest in gas-powered vehicles, reflecting challenges in profitability and consumer preferences, with GM’s role being crucial in providing Hertz with potentially profitable EV options. This strategic adjustment follows Scherr’s October remarks about scaling back on EVs, which then constituted 11% of Hertz’s total fleet. Hertz expects to see enhanced financial performance and better financial results by the end of 2025, predicts better financial results driven by higher revenue per day and reduced depreciation and operating expenses.



Read more: Hertz Revises Fleet Strategy, Reducing EV Holdings in Favor of Gas-Powered Cars