President Trump’s auto tariffs may have sparked fears of price hikes among consumers, but some car-buying businesses could actually benefit, according to investor Bill Ackman. The Pershing Square Capital Management founder made a bullish case for Hertz yesterday (April 17), after revealing a nearly 20 percent stake in the car rental company.
“Hertz is uniquely well-positioned in the current tariff environment,” Ackman wrote in a post on X. As 25 percent levies on imported cars drive up used car prices, the value of Hertz’s fleet—around 500,000 vehicles worth roughly $1.2 billion—will rise in tandem, he argued. A 10 percent increase in used car values would boost the company’s fleet value by $1.2 billion, nearly half of Hertz’s current market cap.
Shares of Hertz surged more than 44 percent following the disclosure of Ackman’s 19.8 percent stake.
Emerging from bankruptcy and an ill-fated Tesla experiment
Hertz has had its fair share of troubles in the past few years. After declaring bankruptcy in 2020 during the Covid-19 pandemic, the company pivoted hard to electric vehicles—placing a costly bet on Tesla that fell flat due to soft demand. In February, Hertz reported a $2.9 billion loss for 2024 and said it had sold off 30,000 EVs from its fleet.
Ackman, who began building his position in the company last year, is betting on a successful turnaround—and a stock price that could more than triple to $30 per share by 2029.
That task falls in the hands of Hertz’s new CEO Gil West, who stepped into the role in early 2024. West is focused on “rotating Hertz’s fleet, increasing unit revenues, and reducing operating costs” to “significantly improve profit margins over the next several years,” Ackman said.
In a note to employees today (April 18), West praised Ackman’s support and described it as an “testament to our progress,” according to Bloomberg.
Ackman also highlighted Hertz’s advantageous position in an “oligopoly.” He noted that Hertz and its two rivals, Enterprise and Avis, currently control around 95 percent of the car rental market. Praising Enterprise as the best-run of the trio, Ackman pointed to its estimated 20 percent profit margin as evidence “that the car rental business can be very profitable.”
Is a Hertz-Uber partnership on the cards?
Ackman floated the possibility of a partnership between Hertz and Uber (UBER)—another company Pershing Square has taken a sizable stake in. “What if [Uber] partnered with Hertz on an [autonomous vehicle] fleet roll out over time?” he suggested, hinting at a potential conversation with Uber CEO Dara Khosrowshahi.
With its large fleet, global footprint and expertise in vehicle maintenance, Hertz would “make it an ideal partner” for Uber, Ackman said.
Uber seems open to the idea. “Hertz has been a great partner of ours,” Khosrowshahi responded on X. “Excited to brainstorm on how we can expand our relationship!”
