Hertz Unloads 20,000 EVs from US Fleet, Reinvests in Traditional Cars Car Rental Company Hertz Shifts Gears: Plans To Sell 20,000 EVs From US Fleet, Reinvesting In Traditional Cars For Enhanced EBITDA

Published On: January 11, 2024 11:51 am

Hertz to Sell 20,000 Electric Vehicles

Hertz Global Holdings, Inc HTZ has made the decision to divest approximately 20,000 electric vehicles (EVs) from its U.S. fleet, which accounts for about one-third of its global EV fleet.

Reinvestment in Traditional Cars

The process, initiated in December 2023, is expected to occur throughout 2024, encompassing various makes and models of electric vehicles. Hertz anticipates that this move will allow for a better balance of supply and demand for EVs and reduce the number of lower-margin rentals as well as lower damage expenses associated with EVs. Remarkably, the EVs earmarked for sale will remain available for rental within the fleet during the entire sales process.

Financial Impact and Outlook

The company also plans to reinvest a portion of the proceeds from the sale of EVs to purchase internal combustion engine (ICE) vehicles in order to meet customer demand. Although Hertz foresees an additional $245 million in depreciation expenses from this proposed sale taking place in the fourth quarter of 2023, it believes that it will improve Adjusted Corporate EBITDA across 2024 and 2025. Moreover, Hertz expects the incremental free cash flow generation to range between $250 million and $300 million over 2024 and 2025.

Financial Projections and Reports

Hertz anticipates reporting revenue for Q4 of 2023 within the range of $2.10 billion-$2.20 billion (consensus $2.20 billion). The company is scheduled to release its financial results for the fourth quarter ended December 31, 2023, on February 6, 2024.