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Car rental service Hertz Global Holdings Inc HTZ has reportedly decided to pause its planned procurement of Polestar vehicles this year on the heels of its decision to downsize its EV fleet.
What Happened: While Polestar has agreed to waive Hertz’s requirement to buy a particular number of EVs from it in 2024, Hertz has agreed to not sell the Polestar vehicles in its fleet too early or cheap, Financial Times reported, citing Polestar CEO Thomas Ingenlath.
As per the report, Hertz will keep the existing Polestar cars in its fleet for longer than a year and Polestar will have the right to first refusal when the rental firm indeed decides to let go of the vehicles from its fleet.
The CEO further told FT that the company intends to resume sales to Hertz in the future. However, whether it will start in 2025 is subject to review, he added.
Hertz announced a partnership with Polestar in 2022 under which the rental firm said it will purchase up to 65,000 electric vehicles from the Swedish EV maker over 5 years.
Why It Matters: However, Hertz announced its intention to scale back its EV fleet during its third-quarter earnings call in October, citing higher collision and damage repair costs for EVs compared to traditional vehicles. Although the company initially aimed for 25% of its fleet to be electric by the end of 2024, Hertz CEO Stephen Scherr clarified that it’s not a rigid timeline.
In January, Hertz announced that it will sell about 20,000 EVs in its fleet over the year. The company has already started selling the Tesla vehicles in its fleet.
Price Action: Polestar Automotive Holding UK PLC PSNY shares dropped 7.3% to close at $1.66 on Monday while Hertz shares dipped 5.6% and closed at $8.21, according to data from Benzinga Pro.
Photo by Jeppe Gustafsson on Shutterstock
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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