Hertz, the American car rental company that used to be Tesla's largest customer, plans to sell one-third of its electric vehicles in the United States and reinvest in gasoline vehicles.
A regulatory document released on Thursday (January 11th) local time shows that Hertz began selling 20000 electric vehicles last month, a move that will continue until 2024. The company expects that the plan will generate approximately $245 million in additional depreciation expenses in the fourth quarter of 2023.
In October 2021, Hertz, which had emerged from bankruptcy, announced that it would purchase 100000 Tesla cars, setting the largest order in Tesla's history and pushing Tesla's market value to break through the $1 trillion mark. Therefore, Hertz can be considered an important wind vane in the electric vehicle industry.
But more than two months ago, Stephen Scherr, CEO of Hertz, stated in a earnings conference call that the pace of increasing electric vehicles will be slower than previously expected. Xie Er said at the time, "Most of our automotive categories have achieved profit margins, with the only exception being electric vehicles, as they have high maintenance costs."
In addition, the sales of electric vehicles in the United States have also encountered bottlenecks. According to data from Cox Automotive, the largest automotive trading platform in the United States, electric vehicle sales in the fourth quarter of 2023 only increased by 1.3% month on month, compared to 15% and 5% in the first two quarters, respectively. Analysis suggests that consumers are deterred by high costs and high interest rates.
Correspondingly, Hertz plans to use a portion of the funds raised from selling electric vehicles to purchase gasoline powered vehicles. The document states that the company expects this move to better balance the supply and demand expectations of electric vehicles.
In the latest interview, Scheer stated that "the cost increase related to electric vehicles continues to exist. It has been proven that the company faces significant challenges in this issue." Looking ahead, Hertz will closely monitor the demand for electric vehicles among dealers and its own operations to determine whether the company should purchase more vehicles.
Scheer also revealed that Hertz's agreements to purchase 175000 vehicles from General Motors and an additional 65000 electric vehicles from Polestar over the next four years may take longer to complete.
In addition, the company plans to tilt towards cheaper electric vehicles, such as the Chevrolet Bolt and Chevrolet Equinox, which Scheer said may be easier to rent and profit from.
Previously, Scheer had complained that Tesla had driven down the overall retail price of electric vehicles, resulting in a decrease in the value of the company's electric vehicles compared to last year. "If it weren't for the drag of the electric vehicle business, profit indicators might have exceeded expectations."