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== Competitor expectations and results ==
== Competitor expectations and results ==


* Hertz missed estimates for profit amid Tesla price cuts, rising costs of repairs, stronger resale value in the previous year, and rising depreciation costs. The company said price cuts by Tesla has lowered resale value for its EVs by about one-third and that the price of repairing an EV is now double the costs for repairing a gasoline car<ref>https://finance.yahoo.com/news/hertz-misses-profit-estimate-tesla-134859568.html</ref>.
=== Hertz ===
* The company witnessed higher incidence of EV collision and damage, which is a company-specific problem since EV market in U.S has lower incidence of EV collision compared to ICE market.
* Hertz has 50,000 EVs, of which 35,000 are Tesla EVs.
* "Hertz made $800 million more selling vehicles last year than it will this year," Chief Executive Officer Stephen Scherr said.
 
* Depreciation cost was up year-over-year due to a decline in net vehicle disposition gains which was at elavated levels in 2022.
* Demand was strong in the quarter and pricing was above the pre-pandemic levels (stable). "We believe that various inflationary factors will continue to support tighter fleets and more elevated rates versus those historically experienced in the industry, all consistent with our ROA focus," Scherr said. They expect year-over-year declines to moderate as they move through October, as they have witnessed "ongoing strength in leisure across North America as well as Europe."
* In Q4, Hertz expects depreciation to "key off the market and to fall within a range of 280 to $300 per unit with variability to be occasioned by volatility and residual values which could alter gross and net depreciation and which may cause us to adjust our fleet plans accordingly through the end of the year."
* Scherr said EV price declines will benefit them in terms of forward purchases.
* Some airlines seeing softening in demand.


==== Summary of results ====
{| class="wikitable"
{| class="wikitable"
|+
|+
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|Revenue per day (Pricing)
|Revenue per day (Pricing)
|$62.46
|$62.46
| -7%
| -7%
|2%
|2%
|
|
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|83%
|83%
|3%
|3%
|
|1%
|
|
|-
|-
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|
|
|-
|-
|International segment  
|International segment
|
|
|17%
|17%
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|Americas pricing
|Americas pricing
|
|
| -8% (lapping of strong quarter)
| -8% (lapping of strong quarter)
|2%
|2%
|
|
|-
|-
|International pricing  
|International pricing
|
|
| -6% (lapping of strong quarter)
| -6% (lapping of strong quarter)
|3%
|3%
|
|-
|North America leisure business pricing
|
|
|6%
|
|-
|North America fixed-cost business pricing
|
|
|0%
|
|
|-
|-
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|}
|}


== References ==
==== Insights from the earnings call ====
* Hertz missed estimates for profit amid Tesla price cuts, rising costs of repairs, stronger resale value in the previous year, and rising depreciation costs. The company said price cuts by Tesla has lowered resale value for its EVs by about '''one-third''' and that the price of repairing an EV is now '''double the costs''' for repairing a gasoline car<ref>https://seekingalpha.com/article/4643811-hertz-global-holdings-inc-htz-q3-2023-earnings-call-transcript</ref>.
* The company witnessed higher incidence of EV collision and damage, which is a company-specific problem since EV market in U.S has lower incidence of EV collision compared to ICE market.
* Hertz total EV fleet is about 11% of the total fleet (590,000), Tesla's represent 80% of that.
* "Hertz made $800 million more selling vehicles last year than it will this year," Chief Executive Officer Stephen Scherr said in an interview<ref>https://finance.yahoo.com/news/hertz-misses-profit-estimate-tesla-134859568.html</ref>.
 
* Depreciation cost was up year-over-year due to a decline in net vehicle disposition gains which was at elavated levels in 2022.
* Demand was strong in the quarter and pricing was above the pre-pandemic levels (stable sequentially). "We believe that various inflationary factors will continue to support tighter fleets and more elevated rates versus those historically experienced in the industry, all consistent with our ROA focus," Scherr said. They expect year-over-year declines to moderate as they move through October, as they have witnessed "ongoing strength in leisure across North America as well as Europe."
* In Q4, Hertz expects depreciation to "key off the market and to fall within a range of 280 to $300 per unit with variability to be occasioned by volatility and residual values which could alter gross and net depreciation and which may cause us to adjust our fleet plans accordingly through the end of the year."
* Scherr said EV price declines will benefit them in terms of forward purchases.
* "I would say in our Hertz brand, which plays to a more premium product both by way of service, offering loyalty and the like, we continue to see strength in leisure both in North America and in Europe, "Scherr answered an analyst who asked about the state of demand while noting that some airlines seeing softening in demand.
 
==== Implications for Sixt ====
 
* Mixed results. Strong demand in the quarter and a decline in pricing year-over-year.
* Sixt might also witness a strong decline in resale value of its EVs.
* Sixt likely to incur huge depreciation costs due to lapping of quarter that had strong resale value?
* Ongoing strong demand in the current quarter.
 
==== References ====
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