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.
Some of that’s 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.
Really informative video. Thank you.
I am kind of happy that I cheaped out on my car when I bought it. The only real issues I have had were that the speakers bugged out so that one side sounded like faulty wiring inside a tin can, and the Bluetooth connection made it impossible to make or take calls while driving as it blasted the caller or recipient with aggressive loud static. None of these really needed fixing, music is nice but not a must have and I could blame the car when I didn’t want to talk to people when I was driving or running errands. The new owner hasn’t seemed to notice or has no complaints…
Funnily enough, I thought I’d have to sell the POS at a loss, but I got money back that covered my car loan and afforded me an e-bike at least.
Tried with an EV car from a car pool for a while as well, but the e-bike was so much better.
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.
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.
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.
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
For example, the 2023 GMC Hummer EV, a full-size pickup, weighs more than 9,000 pounds, sporting a 2,900-pound battery. In comparison, the 2023 GMC Sierra, also a full-size pickup, weighs less than 6,000 pounds, according to Kelley Blue Book.
Traffic safety is particularly concerning. In crashes, the “baseline fatality probability” increases 47% for every 1,000 additional pounds in the vehicle — and the fatality risk is even higher if the striking vehicle is a light truck (SUV, pickup truck, or minivan), according to a 2011 study published by the National Bureau of Economic Research.
Tesla is notoriously shitty with repairs and the fact that they are dumping them because of that is not surprising.
