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(Bloomberg) -- Hertz Global Holdings Inc. said it finished selling off 30,000 electric vehicles, many of which were Tesla Inc. models, as the rental giant moves on from an ill-advised bet on plug-in cars that customers didn’t want and were expensive to maintain.
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The headlong push into EVs contributed to a loss of $2.9 billion in 2024, Hertz said Thursday in a statement that detailed fourth-quarter earnings. The company lost $1.18 a share on an adjusted basis in the quarter, worse than the 73-cent deficit expected by analysts, according to estimates compiled by Bloomberg.
“As I reflect on my first eight months at Hertz, 2024 was undoubtedly a challenging year for our company,” Chief Executive Officer Gil West said on a call with analysts. “We’ve taken the necessary actions to turn the page on the past and set Hertz up for on-going success.”
Hertz has been taking tough medicine to clear out EVs and other models with high depreciation in the fleet. That should mean Hertz will see results improve as the year progresses, Chief Financial Officer said Scott Haralson said on the call.
Adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter was negative $357 million. Haralson said the company expects another negative result on that basis in the current quarter as a result of losses on older vehicles sold, before turning positive later this year.
Second-quarter adjusted Ebitda should be roughly break-even, followed by a “sizable” third-quarter profit on that basis and a smaller one in the final three months of 2025. The company expects a low-single digit adjusted Ebitda margin for the year, Haralson said.
Since taking over in April of last year, West has dumped battery-powered models and other higher-depreciation vehicles to freshen Hertz’s fleet with lower-maintenance cars to position the business for more profitable growth. His plan is to match Hertz’s vehicles more closely with consumer preferences in the rental market, and make other operational improvements that it expects to complete by the end of 2025. West said 60% of the company’s vehicles were one year old or less said at the end of 2024.
Hertz shares fell 8% as of 10:46 a.m. in New York, paring an earlier 14% decline.
The company showed improvement in depreciation costs, which fell 16% to $422 a vehicle per month, but that is still high compared with historical levels of less than $300. Hertz said it’s changing over vehicles in its fleet to bring depreciation costs in line with more normal levels.