Car rental giant Hertz (HTZ) ended the first quarter with 50,000 EVs in its fleet, accounting for 10% of its total vehicles. In Q1, Hertz credited its electrification strategy for the company’s growth and positive outlook for the remainder of the year.
In the first three months of 2023, Hertz generated $2 billion in revenue, up 13% year-over-year (YOY) on higher leisure and corporate demand.
Hertz CEO Stephen Scherr said the company is seeing continued growth across all customer segments alongside sustained pricing. He explained:
Our continued investments in the business, particularly in the areas of technology and electrification, are improving our operational cadence, extending our reach in rideshare, and enabling the revitalization of our value brands.
Hertz has been at the forefront of the electric vehicle transition in the rental industry. The company first announced a massive 100,000 Tesla Model 3 order last year while, more recently, adding Model Y options.
Shortly after adding Tesla models to its fleet, Hertz formed a new partnership with Uber to allow its drivers access to electric vehicles.
Hertz has since added several new EVs to its fleet from different OEMs, including an order for 65,000 Polestar models and, more recently, another considerable order for 175,000 GM electric cars.
Hertz expands its EV fleet in Q1 2023
On the company’s Q1 earnings call, Scherr said Hertz had about 50,000 EVs in its fleet at the end of the quarter.
Scherr says electric cars represent roughly 10% of its total car fleet right now as it continues to expand its zero-emission offerings. He says Hertz has begun taking deliveries of GM EVs and other OEM electric cars in the first quarter, giving customers more options to experience sustainable driving at various price points.
Since its fleet acquisition costs are typically aligned with vehicle delivery timing, Hertz says it has benefitted from the recent EV price declines sparked by Tesla’s price cuts.
Hertz predicts two million EV rentals in 2023, approximately five times the number of trips this past year. The EV rental company also continues expanding its EV charging network buildout through its partnership with BP Pulse at Hertz locations in major cities.
Through Hertz Electrifies, the company aims to increase EV utilization and access to charging with Houston, Denver, and Atlanta already signed up.
As for its rideshare business, Hertz says demand continues growing for electric options. According to Hertz, drivers renting an EV can increase their payout by 10% to 15% compared to an ICE model.
Although 50,000 may seem like alot, it’s not much more than the 48,344 disclosed in its annual filing at the end of the year.
More importantly, Hertz revealed it took delivery of half its 100,000 Tesla order in February, so the numbers are not exactly adding up. It wouldn’t make sense for Hertz to have only 50,000 EVs in its fleet at the end of Q1 after confirming it had nearly 50,000 uber drivers renting a Tesla through its program in January.
Either way, Hertz says it remains focused on increasing EV penetration in the rental business with “considerable growth from here” according to Scherr.
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