Photo: Hertz | Edited
Hertz posted record earnings for 2022, citing electrification as one of the things that contributed to the result. Nevertheless, the company seems to be well behind with its electrification plans. Hertz revealed it has around 430,000 vehicles in its Americas fleet, but only 11% are Teslas. This makes the Tesla fleet much smaller than the 100,000 vehicles planned for 2022.
Hertz announced $8.7 billion in revenue for 2022 and a record net income of $2.1 billion, or $3.36 per share. While no EV-specific data was offered in the shareholder deck, it is obvious that Hertz’s CEO Stephen Scherr toned down the company’s stance toward electrification. His introductory remarks hint at dissatisfaction with the current EV fleet, something that needs to be addressed in 2023.
“We look to our investments in electrification and technology to yield increasing operating leverage and improved returns and an even better product to our customers around the world,” Scherr told investors.
This information is confirmed by Bloomberg, which found that Hertz has far fewer EVs in its fleet than it planned in 2021. The rental company then set a goal to reach 25% electrification by 2024. Soon, Hertz shocked the world by announcing it intends to buy 100,000 Tesla EVs by the end of 2022. Similar announcements followed for GM (175,000 EVs) and Polestar (65,000 EVs), totaling 340,000 EVs. Considering Hertz has around 497,000 vehicles in its international fleet right now, the three agreements would have covered 68% of its fleet with electric cars.
Nevertheless, the company is far from reaching such a level. According to Bloomberg, Tesla EVs represented just 11 percent of its fleet in the Americas, with other brands likely a lot less than that. This means fewer than 50,000 Teslas, considering that Hertz’s rental fleet peaked at 428,700 vehicles last year. This is a far cry from the 100,000 Tesla pledged by the end of 2022. While no reason was offered, it should be noted that Hertz cited the “ability to secure adequate vehicle supply” as a risk factor for its EV initiatives.
Although Tesla experienced a demand problem toward the end of 2022, we don’t think Hertz was talking about Tesla in its regulatory filing. It’s more probably that GM and Polestar were causing this concern. Nevertheless, Tesla repeatedly raised prices for its vehicles throughout 2022, which might have made it costlier for Hertz to acquire its EVs.
Another problem that might have caused a change of heart at Hertz was slowing demand for EV rentals toward the end of 2022. In September 2022, Scherr was bullish about its company’s EV fleet, saying that demand “has been very solid.” Nevertheless, Hertz customers later shared pictures showing hundreds of unrented Teslas piling up on Hertz parking lots. This might explain why the rental company is less confident about its EV future and wants “investments in electrification to yield improved returns.”
“We look to our investments in electrification and technology to yield increasing operating leverage and improved returns and an even better product to our customers around the world,” Scherr told investors.
This information is confirmed by Bloomberg, which found that Hertz has far fewer EVs in its fleet than it planned in 2021. The rental company then set a goal to reach 25% electrification by 2024. Soon, Hertz shocked the world by announcing it intends to buy 100,000 Tesla EVs by the end of 2022. Similar announcements followed for GM (175,000 EVs) and Polestar (65,000 EVs), totaling 340,000 EVs. Considering Hertz has around 497,000 vehicles in its international fleet right now, the three agreements would have covered 68% of its fleet with electric cars.
Nevertheless, the company is far from reaching such a level. According to Bloomberg, Tesla EVs represented just 11 percent of its fleet in the Americas, with other brands likely a lot less than that. This means fewer than 50,000 Teslas, considering that Hertz’s rental fleet peaked at 428,700 vehicles last year. This is a far cry from the 100,000 Tesla pledged by the end of 2022. While no reason was offered, it should be noted that Hertz cited the “ability to secure adequate vehicle supply” as a risk factor for its EV initiatives.
Although Tesla experienced a demand problem toward the end of 2022, we don’t think Hertz was talking about Tesla in its regulatory filing. It’s more probably that GM and Polestar were causing this concern. Nevertheless, Tesla repeatedly raised prices for its vehicles throughout 2022, which might have made it costlier for Hertz to acquire its EVs.
Another problem that might have caused a change of heart at Hertz was slowing demand for EV rentals toward the end of 2022. In September 2022, Scherr was bullish about its company’s EV fleet, saying that demand “has been very solid.” Nevertheless, Hertz customers later shared pictures showing hundreds of unrented Teslas piling up on Hertz parking lots. This might explain why the rental company is less confident about its EV future and wants “investments in electrification to yield improved returns.”
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