Hertz stock rises after Q4 miss, offloading EV fleet
Shares of rental car agency Hertz (HTZ) are spiking up after reporting wider-than-expected losses and offloading around 20,000 Tesla EVs from its inventory. In addition the company announced it will no longer be buying 65,000 EV units from Polestar. The stock recently reached a 52-week low in January.
Yahoo Finance Anchors Rachelle Akuffo and Akiko Fujita break down the latest development for Hertz.
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
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AKIKO FUJITA: Time now to take a look at today's trending ticker. We are watching shares of Hertz jumping. The rental company reporting a wider than expected loss after offloading 20,000 Teslas in the quarter. Hertz also announcing it will no longer buy 65,000 EVs from Polestar as it pivots away from electric vehicles. Hertz CEO saying, he wants to, quote, "spring into 2025 a better company," as it plans to cut $250 million in other costs.
I mean, talk about a wild swing here, Rachelle. We're looking at this stock up more than 7%, but it hit a 52-week low early on in the session. When you look through the narrative here from the company, I mean, it certainly feels like they are pegging a lot of these losses, just the concerns, the headwinds they're facing on the EVs. The CEO specifically saying, though, our business benefited from solid demand and a stable rate environment in the fourth quarter. So demand, he's saying, is looking good, but maybe they miscalculated the expenses and the demand that comes with EVs.
RACHELLE AKUFFO: It's true. And they did mention that. I mean, they said they continue to face those headwinds related to their EV fleet, other costs. But they also talked about the fact that you have a lot of customers who just were reluctant to try an EV. If they went to go and rent a car and perhaps they hadn't driven an EV before were reluctant to try it. And it's some of the same issues that you tend to have just generally with people who aren't willing to try EVs, worried about where they could charge, worried about maintenance and repairs as well.
So to see that 20,000 EVs then roll off the balance sheet here, but still seeing a larger hangover than expected. Surprising here, because I mean a lot of analysts were like posting all these great deals where you could buy some used EVs online. But clearly, at the moment at least, Hertz not really benefiting from that aspect of the business.
AKIKO FUJITA: Yeah, the repair is the higher cost here. When you think about maintenance, there's not a lot of maintenance to be done for EVs as opposed to ICE cars, but those repairs do cost more. And Hertz did cite, when they mentioned they were going to be selling those Teslas, that being a big hurdle as well.
And then to your point, the demand that was there that maybe some drivers tried it a little, realized that the infrastructure isn't fully there right now. So Hertz sort of putting that aside from now, but it's not all a negative story for the company, if you will, going into the rest of 2024.
