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Transportation

Hertz is Selling 20,000 Electric Vehicles To Buy Gasoline Cars Instead (cnn.com) 217

quonset writes: Hertz rental has announced it's selling off one third of its 20,000 electric vehicle fleet and replacing them with gas powered vehicles. The reason? It's costing them too much to repair damaged EVs and their depreciation is hurting the bottom line.

"[C]ollision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle," Hertz CEO Stephen Scherr said in a recent analyst call. And EV price declines in the new car market have pushed down the resale value of Hertz's used EV rental cars.

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Hertz is Selling 20,000 Electric Vehicles To Buy Gasoline Cars Instead

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  • So, paying extra for the EV is not a good choice and customer won't paid extra for the location .

    • Last car I rented was an EV from Hertz. I got it because it was absolutely the cheapest vehicle offered. It was a significant savings over a gas car.

    • So, paying extra for the EV is not a good choice

      I assume that you won't drive it like a complete moron if it's your own car.

      "Whoa! This is so fast! Wheeee!"

  • Math is hard (Score:5, Informative)

    by Tony Isaac ( 1301187 ) on Thursday January 11, 2024 @03:48PM (#64150681) Homepage

    Hertz rental has announced it's selling off one third of its 20,000 electric vehicle fleet

    One third of 20,000 is about 6,667.

  • As commoditized as it gets, and EVs arent quite there yet. They have a few EVs in their fleet to cater to the “EV-curious”. And yeah the EV-repair ecosystem hasn’t grown up yet, so

    Give it a decade or three.
    • by Junta ( 36770 )

      For rental, it faces a particularly tricky challenge. The purchaser of the car does not pay for the fuel. That's a *huge* chunk of the potential cost savings to offset initial EV price issues.

      • by Hodr ( 219920 )

        What if they treat it like gas rentals. Would you like to prepay 75KWH at only $0.25 per KWH and not have to worry about charging before you return? If you don't we will charge you $1.00/KWH that needs to be charged. Also, were charging you $25 for GPS rental because we literally can't turn it off on this car.

        • by Junta ( 36770 )

          The issue being that great, they gouged the customer for the discharge. But now they need that car out of service for either 6 or so hours if they want their own level 2 EVSE, or a half hour or so *but* they need an employee to babysit it at a supercharger. It may be worth their revenue in that case, but how many takers for EV rental would they expect if EV rental is a guaranteed extra gouge beyond the gas case?

          • They didn't say this in the article, but my guess is, the gouge for the gas is a huge percentage of their profit. Also, the last I checked, you have to either pay for their insurance or pay for repairs if you damage their cars. So unless the vehicles are having mechanical failures, it's not clear how that cost even plays in. Maybe they charge the same for EV insurance as gas insurance and now they are losing on that price gouge as well.
            • by Junta ( 36770 )

              Wonder how much damage they deal with on the lot, or when an employee is moving it a bit (maybe some of them would drive a return out to a supercharger or something). Or if the customer is unable to actually pay for the damages, or somehow contests the damage.

    • Re:Car rental is (Score:4, Informative)

      by cayenne8 ( 626475 ) on Thursday January 11, 2024 @04:13PM (#64150807) Homepage Journal

      They have a few EVs in their fleet to cater to the âoeEV-curiousâ.

      Well, a few years ago, Hertz went HEAVY in to the EV purchases for their rental fleets.

      I remember seeing a video about it here [youtu.be].

      It was interesting...and it hit in more detail about the expense to repair EV accidents as well as the extreme drops in resale values of recently purchased EVs....so they depreciated much more rapidly than anticipated.

      I think there was less interest in customers for renting EVs too...?

      I thought they were going to try to keep them on a bit longer, but I guess they're at the point where they're cutting losses now.

    • They have a few EVs in their fleet to cater to the "EV-curious" And yeah the EV-repair ecosystem hasn't grown up yet

      Kinda, but not really. I parsed through their regulatory disclosures a few months ago (i.e. well before this announcement) and the truth was significantly more nuanced than you suggest. It's neither true that most of their EVs were being rented to the "EV curious" nor that the EV repair ecosystem you're blaming was central to the issues they were seeing. I'd argue that the lessons you're taking away are largely in contradiction to what the facts actually were.

      From what I recall:
      1) Unsurprisingly, the mainte

  • The Problem is Hertz (Score:5, Informative)

    by fropenn ( 1116699 ) on Thursday January 11, 2024 @03:57PM (#64150707)
    I rented a Tesla from them for a business trip. Thought it would be a fun, interesting experience. I show up to pick up the car and it isn't charged. It has about 30 miles of range. My presentation is 220 miles away. The Hertz guy shrugs his shoulders. It came in late last night, he says. I take it to the nearest supercharger (level 2 maybe?). It says "90 minutes until you continue your trip." Then: "100 minutes until you continue your trip." Then: "120 minutes until you continue your trip."

    I park the Tesla in my driveway and drive my personal car.

    YOU are the problem, Hertz!
    • by Junta ( 36770 ) on Thursday January 11, 2024 @04:06PM (#64150765)

      This would be a point that mostly illustrates an EV problem. In a gas car, it's no big deal when you pick it up under gassed. So this likely happens all the time with rented gas cars, but it's just no huge deal.

      As a homeowner I really love owning an EV. But if I had to immediately use an EV that someone else may or may not have charged, or couldn't plug it in at home, I wouldn't be so happy.

      • If they are going to invest in EVs, then they also need to invest in the infrastructure that keeps those vehicles running...like extension cords! (Granted, this was a non-airport site.)
        • by Junta ( 36770 )

          Guess the counter would be "what's in it for Hertz to 'invest' in EVs or EVSE?" They don't feel compelled to put a gas tank in their parking lot, so what's in it for them to change that dynamic? With gas that is totally the customers problem, and it's harder to do that with EV.

          When the purchaser of the vehicle and the person paying to charge/refuel it are different, then EV has a disadvantage to be selected by the purchaser.

    • Hertz is the problem, but not as you describe it.

      The problem is that they offer cheap rentals of expensive items while offering no-fault insurance at a rate that does not match the repair costs.

      Want to hoon the hell out of a Tesla? Take it off-roading in the desert? Drag race? How about renting a mustang for a high-speed run to vegas and back over the weekend? Broken axle? Blown head? Bald tires? Battery drained all the way to zero? Need a tow truck? As the punch line to the old joke goes: "It's Mr.

    • by AmiMoJo ( 196126 )

      That car was broken if it was telling you 2 hours for 220 miles. Or maybe the charger was broken.

      Either way, no excuse for Hertz.

  • by rwrife ( 712064 ) on Thursday January 11, 2024 @04:08PM (#64150781) Homepage
    I'm a Tesla owner and thought it would be nice to rent an EV in Phoenix earlier this year....it was total regret, they gave me the car with 20% battery and then I couldn't find anywhere to charge the vehicle, whole week was a total nightmare.
    • by shilly ( 142940 )

      Hertz bought the EVs but gave no thought to the system requirements to deliver a good customer experience. But then, delivering a good customer experience is not a priority for any of the big rental companies, so far as I can tell.

      • by CQDX ( 2720013 )

        Or they did and said it doesn't make business sense to put a bunch of chargers in our already small and crowded lots. This is probably why you also don't see gas pumps or repair stations at Hertz either.

        • Hertz absolutely has gas pumps. What do you think they do when a customer returns a car with low fuel? Have an employee drive to the nearest station and fill it up? Maybe small locations do that but the large ones at places like airports have their own fuel pumps. I've seen them many times with my own eyes. And, as far as I know, Hertz has (or maybe subcontracts) maintenance facilities. They don't drive the cars one-by-one for oil changes. They also have their own cleaning people who clean the cars b
    • by tlhIngan ( 30335 )

      Not to mention it's Hertz. They have so many issues including getting their customers arrested because they report the car stolen despite it being under a valid rental contract.

      They've even rented out cars that have been marked as stolen by failing to notify the police that the car has been recovered.

      You're happily driving away and get boxed in and arrested and spend the next week in jail because the police thought you stole the car.

  • by rsilvergun ( 571051 ) on Thursday January 11, 2024 @04:08PM (#64150783)
    Tesla's are very expensive and the prices were jacked up during the pandemic. That was great for Tesla but now that the supply chain issues are over prices are coming back down to earth. Worse they are increasingly facing competition in the market space they occupied and it's only a matter of time before the big luxury car companies like BMW and Mercedes and Lexus get serious about electric cars. As in pushing their electric car offerings through big advertising campaigns and incentivizing sales reps.

    With those pressures there's a good chance that Hertz could get stuck with a bunch of cars they can't sell when the time comes and you add to that the relatively high cost of maintenance for current generation EVS which was much larger than people expected and it's no surprise they are dumping their fleet.

    I supposed to good news is that it's only 18,000 cars which isn't enough to drastically affect market prices for used vehicles. At least I don't think it is
    • "...it's only a matter of time before the big luxury car companies like BMW and Mercedes and Lexus get serious about electric cars. "

      Maybe. Or maybe not. GM and Honda both bailed on EVs recently. Ford is signaling the same. Toyota's out too. The mass production luxury brands will pursue it if their affluent target market dictates it... but it's not clear if that's the case.

      Governments are making it existential for them - phase out by 202x or stop selling... but if they all just collectively opt out, then i

      • by q_e_t ( 5104099 )
        https://electrek.co/2023/09/14... [electrek.co] i only got as far as checking one of your claims. The first one wasn't correct. Toyota is continuing with EVs.
      • and I can't say I blame them since the only thing you give up is the tax incentive. But it's only a matter of time before the battery tech coming out of the public University research system makes it into mainstream luxury offerings and Tesla can't really compete there on anything but novelty. The build quality and feature set of a BMW is leagues ahead of a Tesla.

        Gov't won't force gas cars to stop though, there's too much money involved. EVs will just end up being a luxury product with a nice big gov't
    • by sinij ( 911942 )

      it's only a matter of time before the big luxury car companies like BMW and Mercedes and Lexus get serious about electric cars.

      They are, and these cars are very [caranddriver.com] expensive [caranddriver.com].

    • I'm also kinda of the the belief that Tesla has already sold a vehicle to the majority of people who both wanted an EV and are willing to deal with all the design idiosyncrasies inherent to Tesla's cars.

      As for rentals, even though we've got an EV at home, if my partner and I went on vacation and needed to rent a vehicle, we'd absolutely opt for ICE. I don't want to spend what's supposed to be relaxation and fun time sitting at a charger, nor would I want to deal with having to make sure the hotel we're sta

    • by AmiMoJo ( 196126 )

      It's generally a bad idea to buy a used rental. It will have been mistreated and barely maintained.

      EVs tend to hold up better than fossils in that regard, but I still wouldn't but one.

  • by larryjoe ( 135075 ) on Thursday January 11, 2024 @04:15PM (#64150819)

    First, electric car prices have dropped significantly. That's good for new EV buyers, but bad for rental companies selling their used EVs at thousands less than expected.

    Second, electric cars are more expensive to repair, largely due to deficiencies in the service and parts network.

    Third, EV renters tend to get in more accidents. That's not really an EV problem, but EVs (mainly Teslas) tend to attract these types of drivers. Sort of like whenever I visit Las Vegas, I see groups of young people racing each other in rented sports cars on the highway.

    • by CAIMLAS ( 41445 )

      Second, electric cars are more expensive to repair, largely due to deficiencies in the service and parts network.

      I don't think I've heard of a single scenario where the parts weren't available for EV repair. This is not a logistics problem, it's a design problem.

      Every event I can think of, however, was where something -relatively trivial- happened and it cost tens of thousands of dollars to fix - everything from something which would've been a non-event with an ICE to a minor inconvenience.

      • Re:3 reasons (Score:5, Interesting)

        by mlyle ( 148697 ) on Thursday January 11, 2024 @05:00PM (#64151041)

        > I don't think I've heard of a single scenario where the parts weren't available for EV repair. This is not a logistics problem, it's a design problem.

        e.g. https://www.carscoops.com/2023... [carscoops.com]

        Problems during scale up are intrinsic: building the service network early is too expensive, and there's competition for parts between repairs and growing manufacturing. But Tesla has really failed to ramp service capabilities and inventories of repair parts.

        There's some fundamentally increased cost structure to repairing EVs. But I think a big part of what we're seeing is immature infrastructure, logistics, and too much of a monopoly on repair by manufacturers.

        • by AmiMoJo ( 196126 )

          It's not just Teslas though. Any scratch the to the battery and it has to be replaced, because the garage lacks the tools and knowledge to tell if it's just cosmetic, or to replace part of the case.

          It's something that needs regulating. Modularity, tool availability, ease of repair. And a maximum time for part delivery.

  • by ArchieBunker ( 132337 ) on Thursday January 11, 2024 @04:19PM (#64150853)

    Ah yes Hertz, the company who doesn't know where there cars are located and has customers arrested as a result. No shock they are inept at making money. https://www.npr.org/2022/12/06... [npr.org]

  • Economics (Score:5, Insightful)

    by Virtucon ( 127420 ) on Thursday January 11, 2024 @04:40PM (#64150951)

    I travel frequently for business and I rent in destinations that don't have good Taxi, Uber, or Lyft services.

    When I rent a car, I rent from Avis or Hertz, lately mostly from Avis. Why? Hertz isn't the same as it was 10 years ago and went through bankruptcy during the pandemic. EVs introduce new challenges to the rental market, especially with having a vehicle ready to rent. It's not simply ensuring it's fueled, cleaned, and serviced. It can be days or weeks sometimes for a rental car actually to be rented. Even then an EV that was at 100% can lose charge and now you have to have the car attendants go and charge it up again. You don't have that issue with ICE-powered vehicles. They can sit for days or weeks and Hertz hasn't solved that issue.
    Next is the typical wear and tear that affects all fleets, meaning accidents, and even if you can find a shop with technicians certified to do the work, it can take months to get them fixed [sfgate.com] and back into service. Replacement parts availability is also a problem because Tesla doesn't build spare parts ahead of time, so that's a component in repair delay too.

    Rental car companies have been having a difficult time finding new cars to put into their fleets since the pandemic just like everybody else. They were part of the reason we saw clean, low-mile used-car prices hiked up to insane numbers. I guess somebody at Hertz said "hey, we can get Teslas" without thinking it through from their business model's perspective. I think EVs can be a choice for rental drivers but there's a lot of logistics that will need to be involved just beyond buying them. I don't think Hertz thought it through.

    • I wish I had seen your comment before I posted. I said largely the same thing. Would have modded you up instead.
    • Ever left a ICE vehicle standing for a few weeks? I did. Apparently the quality of the fuel here in South America isn't great. The mechanic who had to disassemble the engine showed me the parts that came of the engine from my car. Lots of them needed thorough cleaning and some elements actually needed replacement. After 3 days my car was ready for use again.

      Sure, it is a n=1 experience. But it is mine unfortunately. It made me build up a healthy distrust towards ICE in this part of the world. EV might not b

    • by AmiMoJo ( 196126 )

      They should be just plugging the cars in when they are returned, and leaving them plugged in until they are rented again. Then they will always be at 100% when the customer collects them.

      EVs make great rentals for many customers. The mileage they want to do is way less than the range of the car, and if the rental company is competent they don't need to worry about refuelling or charging it when they take it back.

  • by lusid1 ( 759898 ) on Thursday January 11, 2024 @05:00PM (#64151039)

    I rented one on a business trip, worst mistake ever. Ended up having to cancel a meeting that was beyond the vehicle's range, had to basically leave it at the hotel and uber around for lack of convenient charging options.

  • I like electric cars, and I drive / own a Prius Prime (Electric hybrid). Electric cars can work for people doing short trips, driving around town, going to and from work, and general vehicle related activities. Where they don't work, industrial or maintenance based activities! Talk to almost any head of fleet / vehicle services for a township, or city, and mention they should go "all electric", and listen to why it's a bad idea!

    You can't run a large agile fleet of hard use vehicles on electric because
  • I rented one of these electric cars. It was very difficult, as my wife and I knew it would be. The closest working fast charger was 30 minutes from my home base in Huntsville AL, a relatively high tech town. Many chargers we tried were broken. It was a significant source of stress. Again, no surprise. We were able to manage it.

    But while I was in line at Hertz they surprised another customer by telling him he had to take an EV. He was driving out into the wilds of Tennessee in a car that had a 200 mil

  • by laughingskeptic ( 1004414 ) on Thursday January 11, 2024 @09:01PM (#64151633)
    Hertz is selling used and abused rental Y's for just $3k less than what you can buy a new one for. Unless their "no haggle price" is your starting point for haggling, these aren't a good deal.
  • ... and probably other EVs. Park, drive, reverse and neutral are different. Their proprietary display is different. Aggressive regenerative braking is different. Finding the superchargers takes some understanding, all easy to learn, but I do wonder if the customer agents are trained and if they know what questions to ask for a renter.

    If a renter already knows the Tesla gig, all good, move on. Otherwise, I'd show a paper map of where the superchargers are. Walk to the car and show how to use the navigation t

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