Sixt: EV 'Momentum' Lacking Amid Record 2023 Revenue

Germany-based car rental company Sixt reported 2023 revenue of more than €3.6 billion (nearly US$4 billion), an increase of 18 percent year over year and making it the second year in a row the company achieved record revenue, according to a Friday earnings release. The revenue figure also is 45 percent higher than the 2019 total, according to Sixt.

All three of the company's regions made a "strong contribution" to the revenue growth, according to Sixt. Revenue from its domestic market of Germany increased 23.6 percent compared with 2022 to nearly €1.1 billion and accounted for 29.9 percent of the 2023 revenue total. North American revenue increased 18.5 percent to nearly €1.1 billion, representing 29.7 percent of the total and exceeding €1 billion for the first time. The European market outside Germany was up 14.3 percent to nearly €1.5 billion for 40.4 percent of the total. 

Sixt reported €464.3 million in 2023 earnings before taxes, "the second-best result in the company's history," but that represents a 15.6 decrease year over year. The company also expanded its fleet in 2023 to an average of 169,100 rental vehicles, up 22.2 percent year over year. 

"Our earnings are all the more remarkable considering the significant deterioration in market conditions for e-mobility over the course of the year, rising interest rates and continued high levels of investment," Sixt co-CEO Alexander Sixt said in a statement.

Electric Vehicle Challenges

The deteriorating market conditions Sixt referred to include "the severely worsened environment for the sale of used electric vehicles." The falling residual EV values "led to increased depreciation and losses from vehicle sales and thus a negative impact on earnings in the range of around €40 million for 2023," according to the company. At the same time, demand for e-mobility as a whole "has not yet developed the momentum desired," and the lower demand compared with combustion-engine vehicles "resulted in a substantial loss of revenue."

Sixt responded with bringing "forward significantly" the phasing out of electric risk vehicles—those for which there are no buyback or leasing agreements. At the end of February 2024, the percentage of such vehicles in the electric Sixt fleet was about half as high as on March 31, 2023, according to the company. Sixt added that EVs will continue to make up a part of the Sixt fleet in the future, "however, further developments require a high degree of flexibility."

Sixt's EV challenges echoed some of those cited by Hertz during its earnings call last month, which followed the company's decision to "pause" further EV purchases from Polestar and its decision to sell 20,000 EVs in the Americas, or about one-third of its EV fleet.

 Sixt Q3 performance