Hertz CEO Stephen Scherr told CNBC’s Jim Cramer Thursday that his company will continue buying electric vehicles for its fleet, even though the cars caused some headaches during the last quarter.
The company released its third-quarter report before the market open Thursday, with revenue in line with Wall Street estimates but earnings per share coming in lower than expected. By Thursday’s close, the company’s stock was down more than 10%.
“I think there’s no technology change, EVs included, that run a straight line without some hiccups and challenges, and that’s this,” Scherr said. “The line from A to B is not always straight, it’s not that here. Depreciation is higher because the MSRP [manufacturer’s recommended retail price] came down, but we’re a better buyer on the forward.”
Scherr said Hertz saw its EVs depreciate in value this year as Tesla made significant price cuts to its models. EVs are seeing more damage than combustion engine cars, and the cost to repair them is higher due to a less “robust” supply of parts and available labor, he continued.
EVs make up about 11% of Hertz’s fleet, with Teslas accounting for 80% of the group, Scherr said. He added that Hertz will buy more Teslas as well as General Motors-made EVs, aiming to have 10,000 in its fleet by year-end.
“I would say that GM has a very broad, very well-oiled part supply network that will benefit in how we operate those cars,” he said. “Tesla, no doubt, will develop that over time.”