(Bloomberg) -- Hertz Global Holdings Inc. reported a loss that was nearly three times worse than analysts expected as it accelerated sales of electric vehicles to reduce its fleet of Tesla Inc. models that have weighed on profits for the past year. 

The company said Thursday that it lost $1.28 a share, or $392 million, against analyst expectation for a loss of 44 cents a share. The car rental company took a $195 million charge for the depreciation of an additional 10,000 EVs that Hertz is now holding for sale. While the company met revenue expectations, it is trying to quickly work past its failed bet on electric vehicles that resulted in lower rental rates and higher costs.

Shares tumbled 23% at 10:55 a.m. in New York — on track for their biggest one-day drop ever — and the price sank to a record low of $4.48. Hertz had already fallen 44% this year through Wednesday’s close.

New Chief Executive Officer Gil West appears to be willing to take bitter medicine in the near term to get the right amount of EVs in Hertz’s fleet and reduce the damage the cars are doing to the company’s profits. EVs have higher repair costs than traditional gas-powered vehicles and the values have fallen after Tesla cut prices last year and continued to do so this year. 

On a call with analyst, West outlined his priorities to get the company back on track. All of them related to rolling up sleeves and improving the company’s core operations, whether it be improving the experience at the rental counter or getting Hertz’s cars better aligned with the rental and used-car markets. 

He called 2024 an “transition year,” echoing a phrase used by his predecessor, Stephen Scherr.

“I’m an operations geek and have been for most of my career,” said West, who grew up working in his father’s auto parts store. “Our quarterly results were unacceptable.”

Hertz closed 125 locations in the quarter, many of which were underperforming off-airport sites. The company is also slowly selling off some cars bought last year when vehicles were at historically high levels, a process that should be done in 2025.

West also wants to look at the gritty details of the business, like how the company buys replacement parts and how quickly it gets its vehicles ready to rent when they come back from customers.

Selling down its EV fleet will take time, which means Hertz will spend much of this year unwinding its big bet on electric cars made over the past two years at the behest of controlling shareholder Knighthead Capital Management. Hertz ordered 100,000 Teslas in October 2021 expecting prices to hold steady and for renters to snap them up. The opposite happened.

The company never bought that many and is now trying to sell 30,000 EVs by the end of the year.

Hertz said its monthly depreciation costs soared to $592 per vehicle, an unusually high amount in the rental business. Part of that is because used-vehicle prices rose so much in the comparable period last year when the company made money on some sales. Hertz said the $119 of the monthly per vehicle depreciation was related to the additional EVs that are held for sale.

Collision costs are still an issue. The company’s direct vehicle operating expenses rose 3% to $1.4 billion. If not for collision and repair expenses it would have been flat, the company said.

Besides the company’s EV problems, Hertz performance slumped in other areas. Revenue per day fell 7% to $56.68 and vehicle utilization dropped fell slightly to 76%. Rental companies like to be at 80% or better.

Scherr, the CEO who expanded the EV fleet and later identified the problems and started selling them off, stepped down last month. West, who has held the top job at Hertz since April 1, was the former chief operating officer of General Motors Co.’s Cruise robotaxi unit and before that held the same job at Delta Air Lines, Inc.

(Updates with share move, CEO comments from third paragraph)

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