Happy Valentine’s Day! It’s Friday, February 14, 2025, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Hertz Sells 30,000 EVs After Its Big Bet Failed
Electric vehicles might slowly be catching on among regular car buyers, but they still aren’t flying for rental firms. Higher than expected depreciation and increased repair costs got so bad for Hertz that it pledged to sell off thousands of electric cars from its rental fleet, and now the cost the company paid for its electric gamble has become clear.
Hertz revealed that it lost $2.9 billion over the course of 2024 as a result of its “headlong push” into electric vehicles, reports Bloomberg. The rental giant offloaded 30,000 EVs over the past 12 months to try and recoup some of those losses, but the “ill-advised bet” failed to pay off:
“As I reflect on my first eight months at Hertz, 2024 was undoubtedly a challenging year for our company,” Chief Executive Officer Gil West said on a call with analysts. “We’ve taken the necessary actions to turn the page on the past and set Hertz up for on-going success.”
Hertz has been taking tough medicine to clear out EVs and other models with high depreciation in the fleet. That should mean Hertz will see results improve as the year progresses, Chief Financial Officer said Scott Haralson said on the call.
Adjusted earnings before interest, taxes, depreciation and amortization in the fourth quarter was negative $357 million. Haralson said the company expects another negative result on that basis in the current quarter as a result of losses on older vehicles sold, before turning positive later this year.
After revealing the losses, shares in the company dropped by $1.18 per share, which was worse than the 73-cent dive that analysts were projecting, Bloomberg added.
To try and turn around fortunes at Hertz, new company boss Chief Executive Officer Gil West has made it his mission to offload expensive, high-depreciating models like EVs and some other premium cars. In their place, West is hoping to fill the fleet with cars that align “more closely with consumer preferences in the rental market.”
The move is to help tackle high depreciation costs, which hit $422 a vehicle per month last year. The company’s target is around $300, and Hertz says the new cars it’s buying should help hit that.
West’s target for transforming the Hertz fleet is the end of this year, which I assume means that come Christmas every car you rent will be a boxy SUV with little depreciation.
2nd Gear: Trump Proposes More Tariffs On $240 Billion Worth of Goods
In the three weeks he’s been in office, president Donald Trump has threatened to raise tariffs on Canada and Mexico, add import duties to aluminum and steel, and ramp up taxes paid on Chinese goods that come to America. Now, the “Home Alone 2” actor is eyeing even more fees on imports, this time impacting around $240 billion worth of foreign goods, including cars.
The new tariffs could hit vehicles imported from Europe and Korea, which would hit automakers like Volkswagen, Kia and Hyundai, reports Automotive News. The new tariffs are reciprocal fees that would mark an escalation in the trade war that Trump seems intent on fighting, as Automotive News explains:
Imports accounted for roughly half of the U.S. auto market last year. About 80 percent of Volkswagen Group’s U.S. sales are imported, while 65 percent of Hyundai-Kia’s U.S. sales are imported, according to figures from Global Data, a market researcher. Mercedes-Benz brings in 63 percent of its U.S. deliveries from overseas.
Trump said on Feb. 13 that cars were among the products he planned to hit with additional levies as he announced plans to apply reciprocal tariffs on numerous trading partners.
Trump said the product-specific tariffs would be applied at some point after reciprocal levies, which could go into effect as soon as early April.
It’s unclear how large any new import taxes on automobiles may be, and whether vehicles built under a free trade agreement with Canada and Mexico would be spared from industry-specific duties, should they take effect.
Tariffs on foreign cars all come back to the perceived trade deficit that Trump is a little obsessed with right now. The president thinks it’s not right that high-flyers in the U.S. still drive around in luxury cars from Mercedes and BMW, while bigwigs across the pond wouldn’t be seen dead in the kind of top-tier American pickups that sell in great numbers here.
That feels like a problem that no amount of tariffs would fix, and might instead be down to the kind of cars American brands are making, as well as the stricter efficiency and safety regulations overseas.
3rd Gear: VinFast Sold Nearly 100,000 EVs Last Year
What’s that? You’re fed up with all the negativity in this week’s Morning Shifts, me too! So here’s a fun success story: Vietnamese automaker VinFast has almost tripled its electric vehicle sales over the past year despite the never-ending stream of bad press it receives.
VinFast sold 97,399 EVs in 2024 and more than half of them were sold in the final three months of the year, reports Electrek. The automaker surpassed its own target of 80,000 deliveries after sales jumped 192 percent compared with 2023:
The Vietnamese EV maker said the sales surge was driven by demand for affordable models in its domestic market, like its VF 3 model.
Although most of its deliveries were in its home market last year, the EV maker did see sales pick up toward the end of the year. VinFast delivered 53,139 EVs in the final three months of 2024, representing 143% growth from Q3 and a massive 342% surge from Q4 2023.
As it expands into new global markets, VinFast expects momentum to pick up this year. The company aims to at least double global deliveries this year, which would suggest in the ballpark of around 200,000.
In order to fuel its growth, VinFast has received an absolute boat load of funding from its owner and has so far burned through billions of dollars while trying to make a success of the auto industry.
The funding has so far helped the company launch six electric car models around the world including the VF8 crossover, which is the only model the automaker offers in the U.S.
4th Gear: Porsche Cuts 2,000 Jobs As EVs Struggle
That’s enough good news for one week, back to the bleak stuff. Porsche has announced it’s cutting around 1,900 jobs across its production as the realities of slower than expected electric vehicle sales set in. The job cuts will come across its production in Europe, reports Motor1.
Porsche is set to slash 1,900 jobs across various locations throughout Germany, reports the site. The job cuts will be made over the coming years after it emerged that the automaker’s previous cost-cutting measures weren’t “sufficient enough,” as Motor1 explains:
The new plan will “cut around another 1,900 jobs across the entire company in the coming years,” the spokesperson said.
Attention will fall on Porsche’s primary facilities in and around Stuttgart. Ideally, the company hopes to accomplish the cuts without forced layoffs. Per Automotive News Europe, buyout packages and early retirements will play a major factor. Porsche will also be frugal when it comes to filling new roles. Workers at the large factory in Stuttgart-Zuffenhausen and its research facility in Weissach will bear the brunt of the cuts.
Porsche’s decision to reduce its headcount comes amid a tumultuous time for German automakers. Volkswagen previously warned that it had just a handful of years to turn around its factories, warning that factory closures and job cuts would be on the cards to improve profitability.
Things at Porsche haven’t gotten that bad just yet, but it has also warned about the high costs that could come with turning back to gas power should its bet on EVs fail to pay off.