The company revealed this information in its first quarter earnings report, where it also shared its decision to increase the number of EVs it plans to sell from its fleet.

Hertz stated that it had "upsized" its previous plans to drawdown its EV fleet by an additional 10,000 vehicles. This resulted in a $195 million charge to vehicle depreciation, as the company wrote down the value of the EVs held for sale. Initially, Hertz had intended to sell off 20,000 EVs, but with the revised plans, it now aims to dispose of 30,000 EVs by the end of 2024.

This recent charge adds to the $245 million write-down Hertz took in the fourth quarter, bringing the total losses from its EV venture to a staggering $440 million. The company's EV fleet, which once stood at 60,000 vehicles, will now be reduced to half that number at 30,000 EVs. Notably, a third of Hertz's EV fleet comprised vehicles from Tesla, while the rest came from Polestar, Volvo, and Chevrolet.

The first quarter earnings report also revealed disappointing financial results for Hertz. The company reported an adjusted loss of $1.28 per share, wider than the $0.44 loss predicted by analysts. Additionally, Hertz's adjusted net income loss stood at $392 million, more than double the projected loss of $147 million. This news caused Hertz's stock to drop by 20% during midday trading.

Hertz attributed the increase in depreciation per unit (DPU) to losses from the sale of gas-powered vehicles, as well as the market value depreciation of its EVs and other disposition costs. The DPU rose to $592 in the first quarter, an increase from $498 in the previous quarter and more than double the $253 reported in the first quarter of last year.

The company's previous CEO, Stephen Scherr, who spearheaded the EV strategy, was replaced by Gil West, a former COO of GM's Cruise autonomous unit and Delta Air Lines. West acknowledged the challenges facing Hertz, stating that the company is focusing on optimizing its vehicle supply, reducing operating costs, and increasing productivity.

Hertz made headlines in 2021 when it announced plans to purchase 100,000 Teslas as part of a marketing campaign featuring former NFL quarterback Tom Brady. At the time, Hertz's stock rose by 10%, and Tesla's shares saw a similar surge, eventually propelling the electric automaker to achieve a market capitalization of over $1 trillion.

Nevertheless, Hertz's EV ambitions have faced setbacks. In February 2022, the company struck a deal to buy 65,000 EVs from Polestar but informed the manufacturer in February 2023 of its decision to pause future purchases.

While Hertz struggles with its EV fleet, the retail sales of EVs continue to grow, albeit at a slower pace. According to GM CFO Paul Jacobson, retail customers still show interest in EVs, but fleet operators, such as large corporations, government entities, and car rental chains, have been scaling back their purchases.

Hertz's latest financial report reflects the challenges it faces with its EV venture. As the company endeavors to navigate these difficulties, it remains to be seen how it will reshape its strategy in the rapidly evolving electric vehicle market.