Hertz halts Polestar acquisition and presents disappointing financial figures

Hertz is halting the purchase of 65,000 Polestars. Polestar CEO Thomas Ingenlath told the Financial Times.

In 2022, Polestar announced that it wants to sell 65 thousand cars to Hertz in five years, a deal worth 2.8 billion euros. Hertz wanted to ensure that a quarter of its fleet will have EVs by 2024. The leasing company also made an agreement to buy 100 thousand Teslas.

It was previously announced that Hertz would be selling several Teslas due to declining residual values. Repair costs were also much higher than previously estimated. Ingenlath tells the Financial Times that Hertz is now also ending its purchase of Polestars. So far, Polestar has sold 13 thousand cars to Hertz. These vehicles will remain part of the Hertz fleet.

There is a “clear intention” to resume sales to Hertz on a larger scale in the future, but the two companies should “evaluate at that time” whether to resume sales in earnest in 2025, Ingenlath said.

Advantage

Hertz recorded a net profit of 524 million euros in 2023, a decrease of 58 percent compared to 2022. Hertz had a difficult time, especially in the fourth quarter. The leasing company reported a net loss of 306 million euros.

Hertz CEO Stephen Scherr said the loss in the last quarter was due to “windfalls related to our electric vehicles and other costs.”

“We have taken steps to address these challenges and as we look forward to 2024, we are confident that our planned reduction of EVs and cost base, as well as continued execution of our enhanced profitability plan, will enable us to maintain our operating momentum and improve our financial performance by increasing impact to 2025,” Scherr said.

Sales in 2023 will be approximately 8.3 billion euros, a decrease of 4.6 percent compared to 2022.