Hertz Global Holdings (HTZ.O) announced on Thursday that it will sell around 20,000 electric vehicles from its U.S. fleet due to increased collision and damage costs, and will instead choose for gas-powered vehicles.
The company had stated that it would order 100,000 Teslas by the end of 2022, followed by a choice to purchase up to 65,000 vehicles from Polestar over a five-year period.
“Expenses related to collision and damage, primarily associated with EVs, remained high in the quarter…,” Hertz reported in a regulatory filing on Thursday.
The corporation had previously stated that by the end of 2024, 25% of its fleet would be electric.
Hertz anticipates an additional $245 million in depreciation charges from the planned sale in the fourth quarter of 2023, as well as a reduction in adjusted corporate core profit for the period.
The company stated that it would continue to prioritize boosting profitability for the rest of its EV fleet.
When the company declared bankruptcy in May 2020, used car prices were only just beginning to soar. According to Manheim, which holds auctions for used cars and monitoring the market, prices were up about 20% by August. Hertz benefited from the timing, selling more than 200,000 automobiles, largely in the second half of 2020. Hertz had a global fleet of approximately 650,000 automobiles before declaring bankruptcy.
The companies used car website has over 700 EVs for sale, including the BMW i3, the Chevrolet Bolt, and Tesla’s Model 3 and Model Y SUVs.
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