Hertz Global (NYSE:HTZ) has announced it is selling about 20,000 electric vehicles (EV) from its US fleet — equal to about a third of its global EV fleet — “to better balance supply against demand of EVs.”
In a regulatory filing, the company said the disposals of multiple makes and models of EVs were initiated in December 2023 and will take place in an orderly fashion over the course of 2024.
It expects to reinvest a portion of the proceeds from the sales into the purchase of internal combustion engine vehicles to meet customer demand.
“The Company expects this action to better balance supply against expected demand of EVs,” Hertz said in the filing.
“This will position the Company to eliminate a disproportionate number of lower-margin rentals and reduce damage expense associated with EVs. The company will continue to execute its strategy around EV mobility and offer customers a wide selection of vehicles.”
As a result of the sales, Hertz said it will recognize approximately $245 million of incremental net depreciation expense for the fourth quarter of 2023.
The company guided investors to expect revenue of $2.1 billion to $2.2 billion for the quarter to February 6, 2024. It expects to report a negative adjusted corporate EBITDA, excluding the impact of the non-cash charge related to the EV sales plan, of $120 million to $130 million.
Its shares were down 3.5% at $9.03 in early Thursday trading.