Hertz Selling Off 30% of its EV Fleet because of Tesla

[Drew Dowdell]

Hertz has announced that it will sell off roughly 30%, or 20,000 vehicles, of its EV fleet.  The move came after it announced a scale-back from its original goal of electrifying 25% of the rental fleet. Hertz's original goal was to acquire 100,000 Tesla and 65,000 from Polestar over five years. Teslas make up roughly 80% of the Hertz EV fleet. At the time of this writing, there are 631 Teslas for sale on Hertz's website and only 40 EVs from other brands.

In a statement, Hertz cited substantially higher than average repair costs "for EVs" with extended wait times for parts availability. Additionally, Hertz reported that manufacturers' new lower retail prices hurt the resale values of the existing fleet, leading to substantial depreciation losses. Hertz is expecting to take a $245 million write-down on the vehicles, or an average loss of $12,250 per vehicle. Unlike other brands, Teslas purchased by Hertz were purchased at the same retail price the general public pays without any volume discount.

Our take

While many in the anti-EV crowd see this as an indictment against EVs, it is really more of an indictment against Tesla.  Tesla's use of the Gigapress, while revolutionary technology, means that even minor collisions can be catastrophic to the vehicle. But this technology is coming to other brands as well. General Motors has purchased a Gigapress manufacturer and Volkswagen is planning on using Gigapress in their future vehicles. Additionally, Tesla does not have a deep reserve of spare parts, leading to long wait times for repairs. Tesla's erratic pricing moves have also made it difficult to accurately predict resale value of their vehicles.  For an individual, it is an annoyance but for a corporation that buys 100,000 vehicles, it can cost hundreds of millions of dollars.

But Hertz's loss could be your gain.  If you have been looking at purchasing an EV but don't want to pay the high prices of a new one, a wave of Tesla Model-3 and Model-Y are about to hit the market. Couple that with a $4,000 tax credit for pre-owned EVs and there will be good deals to be had.  Even if you do not buy one of the Teslas from Hertz, this move will likely drop the price of used EVs on the market, so keep your eyes open for a deal.

View full article

[G. David Felt]

Very interesting, guess the resale on other OEM EVs is doing much better with real CEOs at the helm rather than a drug using erratic Musk.

[Drew Dowdell]

26 minutes ago, David said:

Very interesting, guess the resale on other OEM EVs is doing much better with real CEOs at the helm rather than a drug using erratic Musk.

Ford is all over the place with the lightning but everybody else seems fairly consistent

[G. David Felt]

Curiosity gets the better of me, so looked for Washington state to the Oregon border. I found the following:

4 Tesla Model 3 of which only one I would consider as it has only almost 34K miles, rest are high mileage.

1 Tesla Y

1 Chevy Bolt

1 Chevy Bolt EUV.

In using auto trader website, I find 1,084 used EVs for sale. Those in the same price range as above are much lower in mileage. Course also plenty of near new EVs being sold as Certified by dealers. I honestly do not find Hertz sale prices for these EVs motivation for me to consider them for buying.

Used Electric Cars for Sale Near Me in Seattle, WA - Autotrader

[Drew Dowdell]

40 minutes ago, David said:

Curiosity gets the better of me, so looked for Washington state to the Oregon border. I found the following:

4 Tesla Model 3 of which only one I would consider as it has only almost 34K miles, rest are high mileage.

1 Tesla Y

1 Chevy Bolt

1 Chevy Bolt EUV.

In using auto trader website, I find 1,084 used EVs for sale. Those in the same price range as above are much lower in mileage. Course also plenty of near new EVs being sold as Certified by dealers. I honestly do not find Hertz sale prices for these EVs motivation for me to consider them for buying.

Used Electric Cars for Sale Near Me in Seattle, WA - Autotrader

This was only announced yesterday, so you're not seeing any of the 20k destined to be sold off on the site yet. The regional offices haven't had time to react.

Also, they still need to acquire ICE vehicles to replace the fleet, so it will depend on how soon they can get those ordered and delivered too.

I wonder if the order with Polestar is getting cut also or if this is just Telsa without them saying its just Tesla. 65,000 Polestars is a lot for them.

[trinacriabob]

I'm surprised and not surprised.

I'm surprised because they had made a commitment and were making a statement.  I'm also surprised that they didn't buy them with any volume purchase incentives.

I'm not surprised because many renters did not like the Teslas.  They do not have a scan code with a "to do list" for you because it's not obvious what you should be doing to operate all the "necessary" aspects of the car.  Or a sheet they hand you with your rental leaflet. A person sometimes even has to hunt around to find how some things work on a newer ICE car.  We're no longer talking 1999 Cavaliers where you could hop in and go.

I'm open to EVs in a rental fleet.  I will plan and work around the charging and range issues. The dashboard and its interfaces basically need to be more user-friendly and intuitive.  That's what I ask.

[G. David Felt]

1 hour ago, trinacriabob said:

I'm surprised and not surprised.

I'm surprised because they had made a commitment and were making a statement.  I'm also surprised that they didn't buy them with any volume purchase incentives.

I'm not surprised because many renters did not like the Teslas.  They do not have a scan code with a "to do list" for you because it's not obvious what you should be doing to operate all the "necessary" aspects of the car.  Or a sheet they hand you with your rental leaflet. A person sometimes even has to hunt around to find how some things work on a newer ICE car.  We're no longer talking 1999 Cavaliers where you could hop in and go.

I'm open to EVs in a rental fleet.  I will plan and work around the charging and range issues. The dashboard and its interfaces basically need to be more user-friendly and intuitive.  That's what I ask.

Will be interesting to see what the mileage on the additional Tesla EVs that go up for sale as so far the ones they have listed are all high miles so it does not seem to be that folks are not renting them to drive as 50K to 70K miles to me is a high mileage rental auto.

Agree that they FAILED in properly setting up folks to be successful with renting an EV as people are interested, but will give up when it is harder than a traditional ICE auto to rent.

[Drew Dowdell]

4 hours ago, trinacriabob said:

I'm surprised and not surprised.

I'm surprised because they had made a commitment and were making a statement.  I'm also surprised that they didn't buy them with any volume purchase incentives.

I'm not surprised because many renters did not like the Teslas.  They do not have a scan code with a "to do list" for you because it's not obvious what you should be doing to operate all the "necessary" aspects of the car.  Or a sheet they hand you with your rental leaflet. A person sometimes even has to hunt around to find how some things work on a newer ICE car.  We're no longer talking 1999 Cavaliers where you could hop in and go.

I'm open to EVs in a rental fleet.  I will plan and work around the charging and range issues. The dashboard and its interfaces basically need to be more user-friendly and intuitive.  That's what I ask.

I recently rented a Model-3 through Hertz for my visit to my parents for Thanksgiving. I loved the EV aspect of it and charging was easy and convenient.  I hated the interface.  Hertz sends multiple e-mails prior to your Tesla rental telling you how to operate them..... guess who didn't read them.

[daves87rs]

Think they simply had to many, and too much costs for upkeep on the Teslas. Also curious to see how many are rented as well. I imagine there is a little bit of fear there too.

I think they would like a larger variety, preferably ones with less cost of upkeep. Renting these are the best way folks can see how they work. Slowly but surely there will be more…..

[G. David Felt]

On 1/12/2024 at 12:18 PM, daves87rs said:

Think they simply had to many, and too much costs for upkeep on the Teslas. Also curious to see how many are rented as well. I imagine there is a little bit of fear there too.

I think they would like a larger variety, preferably ones with less cost of upkeep. Renting these are the best way folks can see how they work. Slowly but surely there will be more…..

Once Hertz move the bulk into their sales section, it will be interesting to see if they are all high miles like the less than 700 that are currently on the listing. It would seem the EV is a popular rental cause how else would one get all those miles on them. Mileage on a used EV in the 50K to 70K range is not low by any means. Even the vew Bolts/Bolts EUV were all much higher than I was expecting, especially for the price they are charging.

[Drew Dowdell]

On 1/12/2024 at 3:18 PM, daves87rs said:

Think they simply had to many, and too much costs for upkeep on the Teslas. Also curious to see how many are rented as well. I imagine there is a little bit of fear there too.

I think they would like a larger variety, preferably ones with less cost of upkeep. Renting these are the best way folks can see how they work. Slowly but surely there will be more…..

A lot of these were part of a program Hertz set up with Uber to provide cars to Uber drivers, that’s why there are 2022s with 85k miles.

I think the biggest issue was the repair costs caused by Tesla using gigapress coupled with the depreciation hit from Tesla dropping retail prices.

[G. David Felt]

8 minutes ago, Drew Dowdell said:

A lot of these were part of a program Hertz set up with Uber to provide cars to Uber drivers, that’s why there are 2022s with 85k miles.

I think the biggest issue was the repair costs caused by Tesla using gigapress coupled with the depreciation hit from Tesla dropping retail prices.

Does not help with Tesla cutting prices in China again. I think Tesla is going to learn the hard way that selling on price alone will not make a profitable company. Interesting times for Tesla that is for sure.

Gigapress is going into production for so many legacy OEMs that it will be interesting to see how the auto repair business and 3rd party parts deal with this especially if Insurance moves to a total format of dealing with auto wreck claims.