Rental giant Hertz dumps EVs, including Teslas, for gas cars
Rental giant Hertz dumps EVs, including Teslas, for gas cars
Rental firm Hertz Global Holdings (HTZ.O) said on Thursday it would sell about 20,000 electric vehicles, including Teslas, from its U.S. fleet due to higher expenses related to collision and damage, and will opt for gas-powered vehicles.
Shares of the company, which also operates vehicles from Swedish EV maker Polestar among others, fell about 4%. Tesla's (TSLA.O) stock was down about 3%.
Hertz also expects to book an about $245 million charge related to depreciation expenses from the proposed EV sale in the fourth quarter of 2023.
Hertz's decision underscores the bumpy road EVs have hit as the growth rate on sales of those vehicles has slowed, causing carmakers like General Motors (GM.N) and Ford (F.N) to scale back production plans of those vehicles.
Morgan Stanley analyst Adam Jonas in a note said the car rental firm's move was a warning across the EV space and it was another sign that EV expectations need to be "reset downward across the market."
"While consumers enjoy the driving experience and fuel savings (per mile) of an EV, there are other 'hidden' costs to EV ownership," Jonas added.
They almost exclusively bought Teslas and Polestars and are now complaining about maintenance costs? I remember a few years ago, the first time Tesla wasn't on the very bottom of the JD Powers Initial Build Quality list the editors put up a special note that it wasn't because Tesla had gotten better, only because Polestar was even worse.
Seems like Hertz's main problem is common sense.
I'd really like to rent a Hyundai Ionic 5 for a road trip next summer but I can't find anyone local that rents any electrics other than Teslas.
Ehhh, EVs, and modern cars in general, have a bit of a bad habit of adding a bunch of technology that makes what used to be pretty cheap repairs way more costly.
It used to be if you had a fender bender that tore apart your bumper, you were able to replace the bumper for pretty cheap, like maybe $100 just for the part, couple hundred for labor, because it's just a big piece of molded plastic.
Now, the bumpers often house tons of sensors, often up to and including rear-view cameras. Now to replace your bumper and all the sensors, the bill is $5k.
Tesla touch sensitive, motorized door handles…. That are now everywhere… are a perfect example of those.
Even if the flush-handle made enough of a difference to justify it, motorising the thing so it pops out was stupidly over-engineering the problem.
They have a bunch of Chevy bolts in the fleet too. I loved renting them because they were cheap and fun to drive. I'd return them with almost no charge left for their$25 fee, because they were slow charging and I normally didn't have a place to go up for long spells.
NGL the venue was not a bad rental. Just not something I would own. I literally was lost in a parking lot looking for my car and was basically standing next to it when I hit the panic button to find it. It looks like so many other things its hard to find it.
Even the Ioniq 5 is susceptible to this issue. A few people have hit road debris which dented the case around the cells and they were quoted $60,000 (CAD) to replace the entire battery so insurance totalled both cars out.
I've been eyeing this thing to buy since it was released but now I'm second guessing that after hearing this. I assume it's due to Hyundai not having a large enough supply of battery packs in order to have a robust supply of replacement parts, so hopefully they can reduce that price by an order of magnitude once they do.
Polestar was even worse
This surprises me, given the Volvo association
Not really a suprise considering their change in management.
Volvo used to be good, but they've been slipping.
Isn't Volvo a Chinese company now?
Jd Powers initial build quality you say?
I just rented an EV from Hertz. I loved it. I planned to rent one next time I needed a rental.
Granted, I'm not keeping them in business with my 2 rentals a year.
Hopefully the now arriving wave of electric cars built by incumbent car companies won't have the same issues as Teslas in terms of being single integrated bricks of technology that you have to throw out if any part breaks.
Like GM's Optium cars straight up not allowing you to drive because of failed OTA updates? OTA updates should not be necessary in the first place.
I wouldn't be surprised if the hidden costs aren't just around time. EVs are great, generally, but they're sort of purpose specific. Having a 250 mile range (at best), people generally not knowing where to recharge, the additional time to recharge, not being able to charge at a lot of hotels, severely limited long range ability (without a lot of stops)... All of those add up to a poor experience. I can't think of a time where I rented a car and an EV would have been an option that I wanted. MAYBE if I only needed to go as much as a single charge would allow me, but this is just not a good fit for rentals, in my opinion.
100% this. My sister had a nightmare rental experience. The rental company was sold out on gas cars and gave her a Hyundai EV.
She had to drive about 200 miles through some remote areas. When she left, the car said 300 miles. She figured 50% was a good enough buffer. She started driving and range dropped quickly. About 100 mi into the trip, it was saying 40 miles left.
She was in the middle of nowhere with spotty cell reception worried that she would be stranded in the desert. She was afraid enough to call her daughter and say, "If you don't hear from me, send help."
The only charger she could find was at a Hyundai dealer. She just made it, but had to sleep in the car until the next morning when they opened to get the car charged.
She swears never again.
Electric cars are a lot heavier and thus more deadly than gas vehicles—I wonder if the costs they mention related to collisions are largely insurance related
Tesla is notoriously shitty with repairs and the fact that they are dumping them because of that is not surprising.
Everyone seems to miss the "higher expenses related to collision and damage" part which is actually the most important part.
Why would electric cars crash more often than ICE cars? EV and ICE cars should drive exactly the same. I know my electric Berlingo drives exactly the same as ICE Berlingo.
Maybe the reason is that some popular EV brand makes cars that are dangerous to drive by installing non-standard steering wheels, turn signal switches and touch screens instead of buttons (not to mention too powerful engines)? If that's the case it says nothing about EVs in general and definitely doesn't indicate there are 'hidden' costs to EV ownership. Just don't buy bad EVs only because they have more range.
Nothing in that statement indicates EVs are crashing more frequently. What they're saying is that all their rental vehicles are susceptible to crashing but these ones cost a lot more to fix compared to the rest.
Again, why would EV be more expensive to fix after a crash? EV Berlingo uses the same components as ICE Berlingo so as long as the crash doesn't damage the battery cost will be the same. And if battery is damaged the car is probably totalled anyway. So again, is it simply because fixing Teslas is more expensive?
P.S. more frequent crashes could still be the reason and since we recently saw reports about Tesla drivers causing more crashes it probable is.
The main hidden cost is that regular ass people aren't going to be able to afford one for another twenty years or more.
I'm in my forties, and I'm still driving a car from 1999.
I have never owned a new car, all my vehicles have been used, and I've bought them in cash, outright, no car payment.
The prices will never come down on a used EV enough for me to justify the purchase, especially since I can find cars from 20 years ago that don't have excess features that will cost me more money to repair. Like a bunch of rear-view cameras and sensors, often placed inside the bumper, make a small fender bender into a costly repair bill because it's no longer just a bumper, it's a bumper with all kinds of expensive shit inside of it.
You can't find an EV with roll-down windows, no extras, and just a radio. They don't fucking make 'em. EV's were just the first step of the auto industry fully embracing that all vehicles are luxury, and economy cars just don't exist anymore.
Add to all this that charging networks haven't exactly rolled out nationwide and you're left with feeling stuck with ICE cars longer than you'd like.
I would have loved an EV a decade ago, but literally nobody is making an EV I can fucking afford before I croak.
Long story short: As with everything, the blame will be put disproportionately on the poor while ignoring that buying an EV is something most poor people simply cannot afford.
Yup, a cheap EV is an EV with a dead $20k battery in it
Hertz is selling them used starting around $17k (yesterday) and now up to ~$22k:
If you're in the US and meet the income requirements, you should be able to apply the Used Clean Vehicle Credit to drop the price by $4k.
$18k for a used vehicle in 2024 isn't doing too bad.
And specifically for Hertz, used EV prices ended up hurting them a lot here. Tesla's price cuts combined with how fast EVs depreciate over the first couple years impacted their ability to re-coup the cost of the vehicles leading to this.
EVs are a lot cheaper to run so maybe you shouldn't concentrate exclusively on the sticker price. Also, in the long term EVs will be cheaper to buy than gas cars too. Right now the limited availability of batteries puts limits on EV adoption. That will change in the next few years. Then EVs will be both cheaper to buy and to run than gas cars. The problem of increasing complexity and worse repairability applies to all modern vehicles, regardless of drive train.
The problem of increasing complexity and worse repairability applies to all modern vehicles, regardless of drive train.
EV’s were just the first step of the auto industry fully embracing that all vehicles are luxury, and economy cars just don’t exist anymore.
Golly gee whillickers, it looks like I'm already aware of that.
Also, in the long term EVs will be cheaper to buy than gas cars too.
Once again, not before I fucking die. I've been waiting for one most of my adult life.
Right now the limited availability of batteries puts limits on EV adoption. That will change in the next few years.
How, by couping a country with a lot of lithium like Bolivia?
You can currently get a brand new Chevy Bolt for around $20k.
https://electrek.co/2024/01/03/chevy-bolt-ev-prices-under-20000/
I was able to snag one for 14k if you look around.
That is because economy car buyers figured out that you can buy a used car with all the options, so why buy a new car with less options. In 1970 it made sense to buy a cheap new car as cars back then were so unreliable that a used car was not reliable. These days cars will go a lot longer, so you can buy a nice enough used car and not compromise all the features.
Well they've lost my business. I refuse to rent a ICE car here in Europe, unless I'm renting a van or something for hauling something. Why should I pay for gas, give kids asthma, and contribute to climate change whenever I need a car? Plenty of EV options here that aren't shitty like Hertz.
Very noble of you but most environmental issues with cars are not related to what kind of fuel they are propelled forward by. Rental cars are arguably a better option for the environment, because it is one vehicle used by many, regardless of fuel type.
Absolutely, and that's why I don't own a car. But there's no way I'll rent an ICE car from Hertz for a weekend trip if there are better rental services /carshares that have EV cars.
The main issue with EV cars vs ICE cars is that they require a lot more materials and resources, meaning you have to drive more to make them worth manufacturing. If you only use the car on weekends, then it will take years to offset the cost. Which is exactly why it's perfect to have ICE rental cars, since they're shared, they put on a lot more miles, and they are used more frequently than private cars.
Of course the best option for the environment is to not drive at all, which I aim for. I wish there was better public transportation and bicycle infrastructure in Sweden. I do fine with my bike and the trains here in the big city where I live, but once you're 50 km outside of Stockholm, it's just not practical to go on trips without a car with the current state of swedish infrastructure.
Did you read the article? They still rent EVs, just not Teslas.
Tesla is the problem, not EVs.
I live in a ski town, people in rentals drive recklessly and crash the things A LOT. I can absolutely understand the decision to switch to cheaper cars.
The US is also far behind on EV infrastructure compared to places like Europe. In Europe, a long roadtrip is now pretty easy to achieve in an EV. Not so much in the US.
Or Canada, with its long stretches of highway and nothing inbetween (which I happen to love, but its not good for EVs ... yet anway).