Hertz Global Holdings, Inc. (HTZ), a car rental company, said in a filing with the U.S. Securities and Exchange Commission that it has decided to sell around 20,000 electric vehicles or about one-third of the global EV fleet from its U.S. fleet.
The company initiated these vehicle dispositions in December 2023 and that is expected to continue in 2024.
As a result, the 2023 fourth-quarter results will include around $245 million of incremental net depreciation expense related to the sale. Hertz expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine or ICE vehicles to meet customer demand.
In addition, the company expects this action to better balance supply against expected demand of EVs.
This will position the company to eliminate a disproportionate number of lower margin rentals and reduce damage expense associated with EVs.
For the fourth-quarter, according to its preliminary estimates, Hertz sees revenue of $2.1 billion to $2.2 billion.
On average, seven analysts polled by Thomson Reuters expect the company to register revenue of $2.2 billion, for the quarter.
For the fourth-quarter, the firm expects to report a negative adjusted corporate EBITDA, which excludes the impact of the non-cash charge related to the EV sales plan, of negative $120 million to negative $130 million.
Hertz Global is scheduled to report its fourth-quarter financial results on February 6.
HTZ was trading down by 3.42 percent at $9.03 per share in the pre-market trade on the Nasdaq.
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