Car Rental Service Hertz Global Holdings Inc (NASDAQ:HTZ) reflected on Tesla’s impact on its business during the company’s third quarter earnings call this week.
What Happened: Electric vehicles bear a higher cost of collision and damage repair as compared to combustion engine vehicles. This, the company said, weighed on its results in the last quarter and negatively impacted EBITDA. Further, when a car is salvaged, the company must crystallize the difference between its carrying value and the market value of the car.
“The MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that a salvage creates a larger loss and therefore greater burden,” company ...