Hertz EV Fire Sale Failure Shows its NetZero Bloodbath is Just Getting Started, by DAVID BLACKMON

Hertz EV Fire Sale Failure Shows its NetZero Bloodbath is Just Getting Started

DAVID BLACKMON

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Man, just 4 years ago, I would have never dreamed I’d be able to use both the terms “fire sale” and “bloodbath” in a single headline. But then, 4 years ago, Joe Biden had yet to be installed into the presidency, and his trillion dollars’ worth of subsidies for “green” energy alternatives were merely the stuff of Alexandria Ocasio-Cortez’s warped dreams.

As the crashing stock markets raining down upon America and a nascent civil war in the UK demonstrate today, the world has changed a lot since January, 2021, none of it apparently for the better. No element of the changing economic picture in the US has been more damaging than the Biden/Harris effort to subsidize an unworkable and undesired an entire electric vehicle industry segment into existence.

As the Biden/Harris Brave New Electric World rhetoric ramped up to a fever pitch, corporate leaders in the legacy automaker and car rental industries were all too eager to signal their net zero virtues by buying in whole hog to the federally subsidized scam. Management at Hertz awarded Elon Musk a huge wealth-enhancing gift by committing in 2021 to convert 25% of its fleet to EVs by the end of this year.

In order to meet that lofty goal, Hertz invested billions in 2021 to purchase a fleet of 100,000 Teslas and build out supporting infrastructure, providing a huge boost to Tesla’s stock, raising its market cap over $1 trillion for the first time. Hertz enhanced that aggressive move with the purchase of 50,000 Polestar sedans, heaping insult onto financial injury. Polestar itself is bleeding billions and on the brink of bankruptcy after Volvo announced it would stop helping fund the venture in April,

As I wrote here in April, Hertz quickly found out that customer demand for renting electric cars was as tepid as demand to buy them outright. For its troubles, Hertz reported it had lost $392 million during Q1, attributing $195 million of the loss to its EV struggles. Hertz’s share price plummeted by about 20% on April 25, and was down by 55% for the year. The awful Q1 results led CEO Stephen Scherr to resign in March.

Under new CEO Gil West, Hertz embarked on an aggressive program to sell first 20,000, and then 30,000 of its fleet of EVs at below market prices following that disastrous Q1 results report, but now the rental giant is finding out what EV makers themselves have discovered the hard way: American customers are more reluctant to buy the damn things than they are to rent them for a few days.

If that outcome seems like an entirely predictable event, well, you apparently live in the real world and are thus not qualified to lead multi-billion dollar corporations like Ford, GM, Hertz, or Polestar.

But things are only getting worse at Hertz. In its Q2 results, Hertz reported a loss of $1.44/share, missing its less disastrous projection by $.24/share. That equates to EBITDA of a $-460 million, even worse than its Q1 loss. The company also reported a massive increase in monthly fleet depreciation, attributable mostly to the high maintenance costs for its EV fleet which, in addition to all the Teslas and Polestars, also stupidly includes thousands of EVs made by GM, Cadillac, Mercedes Benz, Subaru, and Volvo. The Q1 increase in depreciation alone came to $588 million, per a report at Autobody News.

Year over year, Hertz stock is down a whopping 78%, with most of its troubles being attributed to its EV boondoggle. This is the impact of the Biden/Harris EV fantasy on corporations whose gullible leaders decided it’s a great idea to feed at the federal trough.

It sure is hard to have any sympathy at all for these people, isn’t