Following Hertz’s record earnings report for 2022, the company announced that it would continue to rapidly electrify its rental vehicle fleet in the coming years. Hertz stated that it would continue to improve on what made it thrive last year, including electrification, expanded distribution, and execution excellence.
Despite numerous economic setbacks, Hertz has been a clear frontrunner in electrification in the car rental market. It is also worth pointing out that Hertz’s customers have indeed responded accordingly to the company’s initiatives, as it reported record earnings last year.
Hertz earned $8.7 billion in 2022
Hertz’s earnings report on February 7 revealed that the company earned $8.7 billion in revenue in 2022, with $2 billion earned in Q4. Furthermore, Hertz reported a record GAAP net income of $2.1 billion in 2022, amounting to $3.36 per diluted share.
Notably, a higher EBITDA margin of 27% and improved fleet utilization globally compared to 2021 are vital financial contributors to the company’s significant earnings last year.
Unfortunately, Hertz’s earnings presentation does not have EV-specific sales and rental data.
Following this revenue surge, Hertz stock increased by more than 7%, fueled by the travel industry’s continued growth post-COVID.
But what was it that made the company so profitable? Hertz CEO Stephen Scherr emphasized the importance of electrification.
“Our team delivered on renewed demand for travel, which is continuing. In 2023, we will build on our progress to grow our business across the Hertz, Dollar, and Thrifty brands. We look to our investments in electrification and technology to yield increasing operating leverage and improved returns and an even better product to our customers around the world.”
Hertz CEO Stephen Scherr
100,000 Tesla Model 3 for Hertz
Hertz shocked the rental industry in late 2021 when it announced it would buy 100,000 Tesla Model 3 cars. The company has only expanded its investment since then.
Following the massive Tesla transaction, Hertz ordered 175,000 EVs from GM and 65,000 from Polestar.
In addition, the company has teamed up with BP Pulse to begin placing charging stations at each rental location.
While Hertz stated in its earnings presentation that it would expand its “EV fleet across multiple OEMs,” the rental company did not specify which other automakers it might partner with to purchase more EVs.
In addition to these investments, Hertz has been distinctive in its efforts to maximize the profitability of its new massive fleet of EVs.
The best example is the rental agency’s collaboration with Uber, which allows Uber drivers to rent an EV for a discounted weekly fee.
The inherent benefits Hertz’s EV fleet has brought the company. Last year, Hertz executives joyfully announced that interest in EV rentals had skyrocketed while lowering the company’s operating costs.
