Hertz replacing 20k EVs with gas vehicles.

Hertz to Replace 20,000 EVs With Gas-Powered Cars

That's about 1/3 of their EVs. They are citing weak demand, high repair costs, and a drop in the cars’ values. 

Hertz executives have pointed to high EV repair costs, particularly Teslas, which Hertz CEO Stephen Scherr said could cost twice as much to repair as gas-powered cars. EVs also depreciated more than gas-powered cars, with Scherr blaming Tesla’s “unprecedented” price cuts for undercutting Hertz’s resale values. 

If you are brave enough, they might go fairly cheap.

Discuss.

I think EVs are likely the future.  I just feel like everyone went a little overboard and jumped the gun the last couple years.  

In the present day they cannot be beat for certain tasks.  However, as a 'be all things to everybody all the time' vehicle they are still lacking.  This is not surprising news.  

Now that everybody isn't clammoring over themselves to get their hands on one, I'm thinking about ordering up a Model 3 Perf if they're still available.  

I looked the cheapest ones they are selling now have ~80k miles and are ~$22k. 

About a year and a half ago I got a great deal on a rental from Hertz renting a Tesla at Newark airport. They had just started their partnership with Tesla and were offering great deals for people to try them. It was cheaper than the economy cars, and they said there was no fuel charge if I brought it back with at least 10% charge remaining. Sweet!

Fast forward to about 2 months ago. I was at the same airport wanting to rent the same car. They were now the most expensive rentals available, and they required them to be returned with a full charge. (That's not easy to do with a rental in central NJ). They had about 30 on the lot, and NONE of them had any charge in them. I ended up switching to gas. 
 

I spent a little time talking with the lot manager about them. They found the charging time to be impossible to manage in a rental fleet.  The cars had to sit still for so long charging that it messed up their entire queue.

I don't think EVs make great rental cars. 

EVs are good at a lot of things but, at least right now, being rental cars generally isn't one of them. That said, if you're in a situation where you can make it work they're generally cheap to rent and much nicer than the typical rental E36 M3box.

$22k for a car with 80k rental miles when a brand new one is $35k seems like not a very good deal. Though not as bad of a deal as it was a month ago when the new version was effectively $28k after the tax rebate.

I rent from Hertz a lot, and the last couple of times the absolute cheapest rentals, by a large margin, were electric cars.  And I still rented a regular car.

It just isn't the right use case for a rental.  Who has time on a business or even personal trip to track down a charging station and sit there while it charges?   Also, if you have a morning flight who wants to have to spend half an hour at 5am charging the car before you turn it in?  To be fair, they only have to be turned in at 80%, but still not something I want to deal with on my way to an unfamiliar airport in the early morning hours.   

I read some coverage saying that hertz didn't have fast chargers--or in many cases ANY chargers--at most locations. They basically took EVs killer app (it refuels while parked) and negated it. 

Not surprising.  I think they would be fantastic rentals IF they had charging infrastructure at the rental lot.  I.E. you could always pick it up with a full charge and return it with near-zero charge.  But the current hurdles make it harder.

My ex got a Polestar as a rental and it was one of the worst experiences ever for her.

It was quite a learning experience for Hertz. I haven't been following too closely, but apparently the EVs had a higher accident rate. That's not surprising given their massive acceleration potential, never a good combination with a rental car. They were also being used for rideshare cars, so you had drivers who were always against the clock and driving at high risk times. On top of that, the Tesla UI has a bit of a learning curve that doesn't suit a new operator - even just learning how to wake it up and put it in drive.

Sounds like the rental locations need high speed chargers. Then they can recharge while cleaning. But that's a significant capital investment so it really only makes sense for the hubs like airports.

The best thing about the rental EV program is that it gave a lot of people their first exposure to driving an EV for an extended period. That's good, actual experience is better than reading what your crazy uncle posts to Facebook any day of the week.

It's not surprising there are a bunch of Hertz EVs hitting the market. They're all at about the age when they'd be cycled out of the rental fleet anyhow, and a few years ago Tesla was about the only manufacturer that was able to actually deliver cars so they ended up being a high percentage of the new rental fleet. And yeah, Tesla cutting their prices every few months has certainly kicked the resale in the nuts. Car pricing doesn't usually work like that, and you can bet that was a significant factor for Hertz where the ownership cycle depends on decent resale at the 2-3 year mark.

As much as I'm a fan of evs, right now I don't know that I'd rent one. If I'm in a strange city visiting for a limited time I don't think I'd take that opportunity to learn about their charging infrastructure.  

ProDarwin said:

Not surprising.  I think they would be fantastic rentals IF they had charging infrastructure at the rental lot.  I.E. you could always pick it up with a full charge and return it with near-zero charge.  But the current hurdles make it harder.

Gas rentals would be fantastic if you could pick it up with a full tank and return it empty with no penalty too.

Wally (Forum Supporter) said:

As much as I'm a fan of evs, right now I don't know that I'd rent one. If I'm in a strange city visiting for a limited time I don't think I'd take that opportunity to learn about their charging infrastructure.  

And also relearn the basics of driving a car. Tesla really should have left a "rental mode" that returns to two pedal driving. IMO it's dumb that they got rid of the ability to change regen settings altogether but that's a different discussion.

Also I'm not a rental expert, but I thought rental fleets usually get turned over well before 80k miles? I'm a little surprised they kept all of those teslas so long in the first place.

I'm curious if the repair costs are from damage or maintenance. 

In reply to Toyman! :

They probably go through tires much faster than regular cars. 

In reply to Slippery :

True. 

I would still love to see their cost of ownership and their return on investment for one. 

There has to be some profit there because they are only reducing the fleet by 1/3. That may be due to supply exceeding demand instead of profit/cost.

I'm also curious on repair.  But even purchase price.  

Most 'rental grade' cars are pretty much the cheapest version of any model you find.  They are significantly lower cost than a Tesla.  I would expect repair costs to be lower.  For example, bend the steel wheel on an Altima vs. break the wheel on a Tesla... yeah I would expect the Tesla repair cost to be several times the Altima repair cost.  Combine that with the fact that any rental grade Altima is probably 1/2 the price of a Hertz Tesla and the cost to operate an EV fleet goes up considerably.

In looking, I can't rent an EV locally. Looks like Charlotte is as close as they have one for rent. 

In reply to dps214 :

Many years ago I read an eight page article on the car rental business model in an accounting association magazine. The model came down to buy what ever is cheap with your national fleet account, rent out and maybe break even, sell and make money when the car is sold.

There are 2 different ways to calculate repair costs:

1) Average total cost of repairs per year or over a lifetime

2) The cost of each specific type of repair for one vehicle vs another

The repair costs over a lifetime might be less, but the cost to replace a wheel or an AC compressor (or body work) probably costs more on a Tesla than an Altima. 
 

It wouldn't surprise me if Hertz has very detailed spreadsheets on version 2, and the bean counters are identifying that as higher repair costs. 

It also wouldn't surprise me if they have more accidents with Teslas than other cars. Every single person who rents them is unfamiliar with the controls and has to go through a learning curve. That equates to distractions while driving. 
 

Steve_Jones said:

ProDarwin said:

Not surprising.  I think they would be fantastic rentals IF they had charging infrastructure at the rental lot.  I.E. you could always pick it up with a full charge and return it with near-zero charge.  But the current hurdles make it harder.

Gas rentals would be fantastic if you could pick it up with a full tank and return it empty with no penalty too.

Idk, I could easily see a world where Hertz charges you $20 to fill the Tesla back up (making about a 200-300% markup on the electricity) and everybody walks away happy. The math doesn't quite work like that for gasoline. But instead, Hertz forces customers to do the thing that should really happen at the rental yard. I get why it's set up that way, but that doesn't mean it isn't a missed opportunity. 

FWIW, I have an electric IONIQ 6 press loaner scheduled for the end of the month in LA.

I rented a Suburban in Minneapolis this week and there's always a learning curve as you hustle out of the rental garage.  I'm sure as mentioned electric can be a challenge.

A few things that come together in my mind here. 

1. You guys are right on regarding the "learning a new car" rental nightmare, I see it a lot and there is a lot of difference to learn on a Tesla.
2. Spot on regarding having to learn about EV infrastructure, I would go further about that there is a learning curve regarding building time in for it. Also, do you have to get a phone app, or work through the car, or???   Plus, In many EV heavy areas, wait times (meaning other cars at them waiting for one to be free) for fast chargers are a commonality.
3. I have seen a lot of stuff about how fast EV's go through tires, ESPECIALLY RWD ones.  Heavy car, instant torque..  yup.
4. Repair costs - with a Tesla, arent you still pretty much beholden to Tesla to get it fixed?  I am sure there are a few independent shops around, but not enough to make a dent. I know I heard a lot a few years back about nasty stuff getting them repaired, service availability, parts availability, etc. (REALLY been hearing bad things about trying to get a Rivian repaired after a crash for example). 
5. Its likely spot on that it could work VERY well, but the infrastructure (chargers at airports, repair facilities) and customers (adapting to a different vehicle than most out there) just arent ready for it. 

In reply to Tom Suddard :

Right. But earning that $20 is gonna cost them serious money to upgrade their infrastructure and add enough fast chargers to keep their fleet moving through their check-in process in a timely manner. 
 

Tom Suddard said:

FWIW, I have an electric IONIQ 6 press loaner scheduled for the end of the month in LA.

And this is how you get Mofos attention. I will be waiting for that review.