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.
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.
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).
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.
That’s not an EV problem, but one of infrastructure.
This is like complaining about useless combustion engines when driving somewhere with no gas stations…
If the infrastructure doesn’t support EVs for a journey, that’s an EV problem.
The argument here is always that EVs need to solve a problem to become viable. No, they don’t. They don’t need to develop EVs with insane ranges to adapt to a non-existent infrastructure.
That’s just diversion. Fix the infrastructure instead of pretending that EVs need fixing imaginary problems first.
Only partially, inaccuracy in range estimations are certainly an EV problem.
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.
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.
Ring me when I can buy it with $3k-5k in cash like I’ve been doing most of my damn life or I will continue to not give one fucking shit.
$18k, what a fucking joke and a half, for a vehicle that’s way more costly to repair.
That’s just buying a used car. No new cars have ever been in the 3k-5k range…my car from like 10 years ago was in the 18k range.
That’s simply not in line with reality. Used gas cars aren’t even selling for that low.
Funny because my local craigslist has fucking plenty of 2000-2010 vehicles in that price range. Plenty of private sellers still go in that range.
Sure, if you want a vehicle with 250k miles or known transmission issues (i.e. Ford Fiesta).
My Pontiac with less than 110k miles on it (only just broke 100k last year) begs to differ but you do you.
The 1970’s called - they want the idea that cars are worn out at 250k miles back.
Modern cars with 250k miles are just broken in. They are not in perfect condition anymore, but with minimal maintenance most still have a lot of life left.
My fiat 500e is worth ~$5k.
Simple car, minimal extra features when compared with new. And as of this year a decade old.
I Love it, never had issues with it, and since I bought it 5 years ago has saved me it’s current value in not buying gas alone, not including oil changes, brakes, etc.
I’m not saying ev is for everyone right now and I agree the current ev available new don’t seem to be likely to be good used cars. Just that this one seems to be one that doesn’t fit a lot of your complaints.
This one is finally going to be available in the US in 2024, but I have a deep dread that import costs are going to make it not so cheap of a used vehicle in the US.
Europe and China have blown the US out of the water on affordable EVs and I guess maybe I should make clear I’m speaking very, very Amerocentrically on this issue.
There’s literally a number of affordable Chinese EVs that don’t have a bunch of extra features, but the cost of getting one to the US and making it street legal is basically more than a conventional EV.
I think you misunderstood me. I have the gen1 500e. Not the facelift model. Mine is a 2013 model year.
They were sold in California and Washington almost exclusively.
Wild, I was unaware of that. Looking at the Seattle craigslist, it looks like the Seattle area has a handful of used ones in that price range, 2015 models.
I’m about as interested in servicing a Tesla as Hertz is, especially considering the exploding suspension parts.
The parts availability would be the biggest pain in the ass. I personally would avoid any Model 3 more than a couple years old because of various manufacturing things they’ve run into.
$18k for a used vehicle in 2024 isn’t doing too bad.
What?!? I’ve never paid $18k for a car.
Because of various effects related to the pandemic, the used car market drove the average price of a used car to insane prices. I’m sure you can find cars for cheaper, but:
CR claims around $27k (Aug 2023)
And if this data source from Statista is to be believed, $18k would be below average in 2016.
the used car market is still so borked that I can’t afford one at all.
Absolutely and it fucking sucks since it costs so much more to even finance a car.
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?
How, by couping a country with a lot of lithium like Bolivia?
For starters… by getting rid of lithium. Alternatives might have a lower energy density in theory but also not the thermal issues of lithium-ion batteries. Which means you can pack them more densely without issues, or -even better- produce bigger cells instead of stacking small ones. So in practice they will perform on a similiar level but cheaper, making lithium-based batteries a niche product for high-end luxury items where you pay much more for a little bit of extra performance.
Next Step: You have batteries that don’t run hot or might explode when damaged anymore? Stop putting them insinde the car but make the battery an integral part of the frame.
And that’s just the theoretical side. The economic reality is that a lot of the benefits of lithium batteries are not based on the tech itself but coming from a decade of experience (and optimizations) in manufacturing. A lot of that experience is partly applicable to alternatives so they will reach a similiar maturity in a fraction of the time (= just a few years).
Yup, a cheap EV is an EV with a dead $20k battery in it
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.
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.
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.
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.
Its not even that modern. I got in a small accident in my 2007 Prius and they had to replace the entire front of the body. The bumper, grill, and front quarter panels are all shipped as a single piece.
I think you might have gotten taken advantage of as I’m pretty sure the front quarter panel is not attached to the front bumper and can be replaced individually.
The grill I’m not sure about but I’m pretty sure I’ve disconnected the bumper from the front quarter panel on my 2007.I could also be misremembering the details, it was 10+ years ago and insurance made me take it to the dealer for body work. I remember it was a lot of the front end though.
Modern cars - even in 2007 - were designed to crumple in an accident. I’m not surprised that those panels also go enough damage that they need to be replaced.
Though of course I have no information on this incident. I’m just speculating based on general knowledge without knowing specific facts that are relevant.
That’s certainly possible!
Replaced a taillight for a late model GMC Sierra. Dealer only item, $770 bucks list and had a CORE CHARGE on a taillight. Absolutely nuts.
Polestar was even worse
This surprises me, given the Volvo association
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.
They’re not repairing whatever a Berlingo is. They’re repairing Teslas and Polestars. This is like saying my Camry is cheap to fix, so an SL500 Mercedes should also be cheap to fix.
Also that report about Tesla drivers having the most accidents was complete garbage based on junk data (car insurance applications using the driver’s complete record but only the current vehicle they wanted to insure). Even the company he worked for included a large heading at the top of the page indicating that the statements were simply the opinion of the author.
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.
