Hertz pauses plans of buying Polestar EVs
- Hertz says it will not buy electric vehicles from Polestar in 2024.
- It blamed higher repair costs and lower resale value for the move.
- Polestar stock is down some 3.0% in premarket on Monday.
Hertz Global Holdings Inc (NASDAQ: HTZ) says it will not buy electric vehicles from Polestar Automotive Holding UK Plc (NASDAQ: PSNY) in 2024. Shares of the latter are down 5.0% this morning.
Why doesn’t Hertz want Polestar vehicles this year?
Copy link to sectionIn 2022, Hertz announced an agreement with Polestar to buy 65,000 of its electric vehicles over five years.
On Monday, however, the car rental company based out of Florida, United States cited higher repair costs and lower resale value as it rolled back on the aforementioned deal.
The news arrives only a day before Hertz is scheduled to report its financial results for the fourth quarter. Consensus is for it to lose $1.02 a share versus 50 cents of earnings on a per-share basis a year ago.
$HTZ is now down over 60% versus its 52-week high.
Hertz has been buying EVs from Polestar
Copy link to sectionNote that Hertz did buy some 20,000 electric vehicles from $PSNY in 2022 and 2023 (combined).
But it reportedly contracted Polestar last autumn to explore the possibility of taking a break from the agreement that bound it to buying tens of thousands of its EVs in 2024.
Polestar did agree on the requested pause provided that Hertz committed to not selling its electric vehicles currently in the inventory either “too early or too cheaply”, as per a Financial Times report on Monday.
In January, Hertz Global announced plans of selling 20,000 electric vehicles in its U.S. fleet to reinvest in gas-powered vehicles (find out more).
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