A MAJOR car rental company has U-turned on its EV rollout due to an important issue.
The company seemed to abandon its target to order 100,000 electric cars from a big-name brand.
Hertz has only 35,000 Teslas in its fleet at the moment, just over a third of the number it was meant to have accrued by the end of last year, after announcing its intention to do so in 2021.
And the firm's CEO, Stephen Scherr, did not seem confident that they would be hitting that goal any time soon.
In the Q3 earnings call, Mr Scherr suggested that the brand would be slowing down its purchasing of electric cars.
New acquisitions will be "slower than [their] prior expectations" after the company recorded lower profit margins last year than they had predicted.
READ MORE ON EVS
Major EV brand unveils camper van concept that can transform into a shop
EV drivers don't know about 'hidden' setting which saves their battery in winter
He cited high repair costs as one of the key factors in the slowdown.
During the call, Mr Scherr said: "Higher collision and damage repairs on EVs continued to weigh on our results and negatively impacted [earnings].
"For context, collision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle."
He also suggested that recent price cuts by Tesla in a bid to attract new customers had hurt the resale value of Hertz's fleet.
Most read in Motors
‘Worst motorway driver EVER’ blasted for breaking no.1 driving rule
‘Hidden’ dashboard button is KEY to winter driving but drivers don’t use it
STARS IN THEIR DRIVE
90s superstar selling Bentley at auction after failing to find buyer
Inside EV camper van with beds and shower for under £5k – but there’s a catch
Given the amount of turnover within rental fleets, second-hand sales are a major source of income and the "depreciation" in Tesla's front-line prices hurt margins on the resale market.
Between these two issues, the company estimated that its earnings were "several margin points" lower than if it had an equivalent stable of motors comprised solely of petrol or diesel models.
On the morning of the call, Hertz's stock fell from £8.33 per share to £7.16 per share.
In cash terms, this knocked just over £364 million off the company's net worth.
Hertz has been contacted for comment.
It comes after a driving instructor revealed the morning routine that can help you pass your test.
Meanwhile, motorists were warned that insurance rules could see them lose thousands on vehicles damaged by flooding.
Source: Read Full Article