Hertz Is Selling 20,000 Used EVs Due To High Repair Costs
The rental car company will replace them with gasoline-powered vehicles.
Hertz Is Selling 20,000 Used EVs Due To High Repair Costs::undefined
I initially read the headline as referring to maintenance costs, but it's actually because people who rent EVs were using them under the rent to gig economy business they had. As in, people would rent cars to go do Uber Eats deliveries and such, as the EVs weren't being rented as often as expected from regular rental business. The people who rented these EVs were more likely to damage the vehicle than people who rented gas cars, and the repairs for that damage were more costly to fix.
There wasn't a great explanation as to why the EV rentals were more likely to get into accidents, but it's possible that the EVs were more confusing to operate, or more likely to be driven more aggressively due to the acceleration and performance. It's also possible that the EV models they had were more prone to other issues, like blind spots, worse breaking, or insufficient self-driving, but they didn't seem to distinguish between different makes and models as being more prone to damage.
Reuters noted that they had to put torque and speed limiters on the fleet EVs. These are cars that have performance stats that you would have found on a Viper or Corvette in the previous decade.
I imagine that the following combo is a recipe for disaster: flagship sports car speed + touchscreen centric car controls + eyeballs on mobile delivery apps
people would rent cars to go do Uber Eats deliveries and such
Uber Eats incentivizes driving recklessly. The faster you can complete a delivery, the more deliveries you can make in a night. Also you'll be out during bad ice storms and other weather that reasonable people wouldn't drive in unless necessary. Renting an EV might make the math add up better for doing deliveries, but were it economical to have a fleet of ICE cars doing gig deliveries I suspect they'd have similar issues with damage, although the acceleration and top speed of their EVs might be making the problem worse.
I've only driven EVs a few times for benchmarking but every time I have a hard time adjusting to the single pedal driving. I'm sure you get used to it soon, but if you are just renting short term or may be not enough time to adjust
Apparently it’s related to “expenses related to collision and damage” and they’ve had to put speed and torque limitations on the fleet cars.
Telsas and Polestars are not slow cars, and it sounds like renters are driving them aggressively. I wouldn’t be surprised if torque and speed are also the reason why Tesla is #1 with recent car accidents stats.
Telsas and Polestars are not slow cars, and it sounds like renters are driving them aggressively.
Driving a rental car - any rental car - more aggressively than your own car has been pretty typical behaviour since the beginning of rental cars.
Yeah, last time I've rented a car I wanted an electric but my insurance would not cover me for a Tesla.
They are in the sport car category.
Yeah, but they usually don’t have a lot of those things on the lot to rent. They have a butt load of Model 3s. My guess is that it’s a numbers game.
They also have a ton of data and footage to tell them what people are doing when they’re getting into accidents, and after looking at that stuff, they’re choosing to basically put these cars into a form of valet mode to limit acceleration.
Pretty sure they are #1 due to their touchscreen focus. Its incredibly hard to operate a Tesla safely.
I appreciate that this article isn't going for the "electric cars are bad see even hertz can't make them work" angle, and instead has more of a "someone left a chair on the curb if you have any interest" vibe
It's all Tesla and I do not want to be associated in any way with that whiny little bitchbaby Musk. Hard pass.
Some of the used EVs are rather affordable—the cheapest Model 3 is just $20,125. A long-range Model Y will cost a fair bit more than that, although even here, the most expensive one for sale by Hertz is just $38,116. As a reminder, there is now a tax credit of up to $4,000 available when buying a used EV that costs less than $25,000, assuming one meets the income caps.
But they are all ex-rental cars, and that means most of these cars have had relatively hard lives and now have plenty of miles on them—the cheaper Model 3s are all closing in on 100,000 miles. Not all of them, though—in New Orleans, there's a Kia EV6 up for sale with just under 5,000 miles.
Who is going to pay upwards of $20,000 for a car with nearly 100,000 miles on it?
Sadly, the used car market is high all the way across. Finding deceng vehicles under 20k with less than 100k miles would be tough.
This does not entirely surprise me. When Tesla became well-known a significant fraction of taxi services in my country switched to Tesla. Why: a) it was cheaper to buy since subsidies for EVs, b) electricity being cheaper than fuel, and c) Tesla being perceived as luxury.
Within a couple years most taxi services had gone back to ICE cars. The Teslas had inferior build quality, and repair turnaround time was awful compared to regular ICE cars. This meant a large fraction of the Tesla fleet was idle as they were waiting to be repaired.
I wouldn't be surprised if Hertz encountered the same. It's not that EVs are bad. It's that the largest supplier of EVs in the West, Tesla, is bad and slow to repair cars.
Ya think they would get some sort of a deal (federal or business) when it comes to repairing a fleet of EVs.
This is the best summary I could come up with:
After announcing big plans to purchase tens of thousands of EVs from Tesla and then Polestar, it's now liquidating a third of that fleet, the company told investors.
After Hertz went bankrupt during the early days of the pandemic, its big EV ambitions began in 2021, when the company revealed it wanted more than 20 percent of its rental fleet to be electric by 2022.
By early 2023, it was still far short of the ambitious goal, in large part due to Tesla's inability to actually fill that order in time, and EVs still represent just 11 percent of the total Hertz rental fleet.
But it may not actually be that upset at falling short—it turns out that the electric rental cars haven't been the panacea it needed.
At the end of Q3 2023, Hertz told investors that significant price cutting during the year had "resulted in lower EV residual values, increasing vehicle depreciation expense and negatively impacting salvage cost."
As a reminder, there is now a tax credit of up to $4,000 available when buying a used EV that costs less than $25,000, assuming one meets the income caps.
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