Hertz's Ambitious EV Push: Challenges, Opportunities, and the Path Ahead

🔋Hertz's plan to buy 100,000 Teslas for its fleet aims to meet the growing demand for electric vehicles and position the company as a first mover in the industry.

💰Hertz faced challenges such as pricing troubles, skyrocketing repair costs, and low resale values in its EV program.

🚗The company shifted some of its EVs meant for rideshare into its leisure business, which resulted in a glut of unused cars and lowered revenue.

⚡️Hertz has taken a leadership role in building charging infrastructure and has partnered with large energy companies to expand its fast charging capabilities.

📈Hertz's overall demand has been positive, with its rideshare rental business growing 50% year over year. Operating costs are in line with expectations.

What are the challenges Hertz faces in its EV program?

—Hertz faces challenges such as pricing troubles, skyrocketing repair costs, and low resale values in its EV program. Repairing damage from accidents is more expensive for EVs compared to internal combustion vehicles.

What advantages does Hertz see in its EV initiative?

—Hertz believes that being a first mover in the EV rental industry will help the company meet the growing demand for electric vehicles and differentiate itself in a commoditized market. The company also sees opportunities to serve corporate customers who are interested in choosing EVs for their employees.

How does Hertz plan to address the challenges in its EV program?

—Hertz plans to reduce the share of Teslas in its fleet in favor of vehicles made by GM and other legacy automakers with stronger parts and service networks. The company is also working on negotiating cheaper parts and investing in building out charging infrastructure.

What is Hertz's strategy for addressing lower-than-expected demand for its EVs?

—Hertz is targeting the rideshare rental segment, where it has seen higher demand and better revenue per unit utilization. The company is also focusing on educating customers about driving EVs and has staged drive events at airports and corporate campuses. Additionally, Hertz has taken a leadership role in building charging infrastructure, which can help attract customers interested in choosing EVs.

What are investors' opinions about Hertz's EV program?

—Some investors want Hertz to pause or abandon its EV program, while others believe the company should persist and reap the benefits in the long run. Despite the challenges, Hertz remains optimistic about the potential of its EV initiative and believes in the positive margin to be had in its existing fleet of EVs.

00:00Hertz announced its plan to buy 100,000 Teslas for its fleet, aiming to meet the growing demand for electric vehicles.

02:43Hertz emerged from bankruptcy and unveiled its big plans, including the purchase of 100,000 Teslas and the setup of fast chargers.

05:31Hertz's EV strategy faced challenges such as pricing troubles, repair costs, and low resale values.

07:39Demand for Hertz's EVs mostly came from customers who were already Tesla or EV owners.

10:09Hertz faced the collapse of used EV values, which affected its balance sheets.

13:01Hertz believes that its investments in infrastructure and partnerships with energy companies will give the company a competitive edge.

14:09Hertz's overall demand has been positive, with revenue increasing and operating costs in line with expectations.