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Hertz (HTZ) Made an Interesting Decision to Light Billions on Fire
Published:
24/7 Wall St. Key Points:
- Hertz Global Holdings Inc. (NASDAQ: HTZ) is taking a $3 billion charge in 2024 after selling off 30,000 Tesla Inc. (NASDAQ: TSLA) vehicles at steep discounts.
- The oversupply of used Teslas could further pressure both new and used EV prices.
- Consumer reluctance to rent EVs due to charging concerns and range anxiety highlights continued adoption challenges.
- While investors wonder whether Nvidia will surge or crash after earnings, the smart money is already looking ahead to “The Next Nvidia” stocks that could soar in 2025. Click here to see the investments that AI experts are buzzing about.
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Transcript:
[00:00:04] Doug McIntyre: Hertz made an interesting decision two or three years ago that they were going to buy several tens of thousands of Teslas on the theory that Americans would adopt EVs fast. And if you adopted EVs, when you rent a car, you want an EV. It didn’t work out for them.
[00:00:22] Doug McIntyre: So they basically sold off at fire sale prices. They may not be done yet. I think about 20,000 Teslas. 30,000.
[00:00:31] Lee Jackson: Yeah, 30,000.
[00:00:33] Doug McIntyre: So it does two things. It depresses the prices of used Teslas and maybe even new ones, but it also means that Hertz is taking a horrendous hit, aren’t they?
[00:00:45] Lee Jackson: Yeah, I mean, a 3 billion charge in 2024, and when you think about it all, I mean, it’s almost like I can understand Hertz, which, which is one of the preeminent car rental company.
[00:00:56] Lee Jackson: I’ve used them for 40 years or 30 years. However, I’m a Hertz number one gold member, and it’s typically a well run outfit, but even if the C suite guys thought that they could somehow appeal to these stupid mandates that the last administration tried to put out there. You, they could have at least kind of scaled in, let’s buy 5,000.
[00:01:18] Lee Jackson: We’ll see how that goes on a rental standpoint. Yeah. Not 35 or whatever the total number was, because what they found out is the customers didn’t trust them. They couldn’t find places to charge ’em, and the, their client base just said, no, I, I want a, a, a gas powered car. I just don’t want one of these. I’m on either a vacation or I’m on a business trip and I don’t want to get stuck, you know, in the boondocks with no power for my electric car.
[00:01:45] Lee Jackson: So. It seems like it was a huge mistake at the top not not to buy them but to buy so many.
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