Shares of Hertz Global plummeted 24% on Thursday, marking the sharpest one-day percentage fall in the company’s history. This drop came after Hertz reported a quarterly loss that was wider than expected, underscoring its challenges in the EV rental business. The company is streamlining its operations due to weak demand and plans to sell 10,000 more EVs, bringing the total planned sales for the year to 300,000. The company also faced higher repair costs, which added to its fleet maintenance expenses. Hertz recorded a $588 million hit in vehicle depreciation costs during the quarter, with $195 million attributed to EVs held for sale.
Hertz CEO Gil West noted that fleet and direct operating costs were key factors impacting the company’s performance in the quarter. Excluding certain items, Hertz reported a loss of $1.28 per share, significantly higher than Wall Street’s expected loss of 44 cents per share. This disappointing news led to a 7% drop in shares for peer company Avis Budget Group. Both Hertz and Avis have seen their market value decrease by approximately half since the beginning of the year. These challenges highlight the ongoing struggles faced by companies in the rental car industry as they navigate changing market dynamics and operational costs.