Hertz Global Holdings, (HTZ), the third largest car rental company in the world, is electrifying its revenues after it has made a major change in its fleet of rental vehicles. It has increased the number of electric vehicles it owns and is looking at increasing the number by the end of the next year to 25 percent of its fleet.
In its latest quarter report, Hertz performed better than Wall Street expectations. Its first quarter revenue was $2 billion. The Estero, Florida based company reported per-share earnings of 39 cents while the forecast was much lower at 21 cents per share.
Many factors have contributed to this increase in ownership of electric vehicles by the rental company despite a slower uptake in electric vehicles by consumers.
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Hertz raised billions in capital after it emerged from bankruptcy post-COVID. It invested in electric vehicle manufacturing companies including Tesla, GM and Polestar.
Although customers pay more for electric vehicle rentals, Hertz expects these rentals to increase four times. The rental company saves on gas and maintenance. It also saves on marketing as many consumers like to rent electric vehicles or travel in them at least once when they use rental services.
Ride hailing services including Uber drivers rent electric vehicles from Hertz on weekly or monthly basis. This also leads to savings as the firm does not have to pay for routine operations such as cleaning.
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EVs also lose less value each month when compared to traditional vehicles. An electric vehicle loses between 0.85 to 1 percent per month while a traditional vehicle can lose about 1.25 percent in value in each month according to analyst Ian Zaffino of Oppenheimer & Co., as per a report in CNBC.
The outlet also quoted Hertz CEO Stephen Scherr in a company’s earnings call where he said that the company’s fleet consisted of about 10 percent of electric vehicles which was roughly 50,000 EVs and that the price drop in these vehicles was a positive factor, and that it was looking to move to 25 percent and higher in the future.
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