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Hertz in the US discontinueing Tesla's from Fleet
- Thread starter Whyone
- Start date
I just looked at the listings for sale.
There were less than Jeeps.
Many of them had well over 50,000 miles on them.
Doesn't sound like a fire sell to me, more like a normal older vehicle sale.
There were less than Jeeps.
Many of them had well over 50,000 miles on them.
Doesn't sound like a fire sell to me, more like a normal older vehicle sale.
I think that is correct - ~2 yr's old / ~50k miles sounds like a fairly normal rental car replacement cycle to me.
However, I think the interesting and significant thing is that they are being replaced with ICE cars - hardly a ringing endorsement for EV's in this environment.
The car rental business model of old is different and Hertz have not coped with the disruption- so are going back to the old ways.
They have traditionally bought fleet level stock at a discount and run it for a year and sold at “normal” second hand prices. That was a profitable side of the business.
With Tesla they had to buy at effectively full market price as Tesla could sell everything they make. As the new price of the cars has fallen the second hand value has also fallen, thus a significant part of their business model was disrupted.
They have been very quiet about that, blaming damage and repair costs. Since those are insured and billed back to customers I can’t see the cost problem there - other than Tesla repairs and spares are not as readily available as for a Ford Focus etc.
The ICE vehicle industry has a catastrophically high inventory level at the moment and they will have been tempted by massive discounts as they turn around their stock.
They have traditionally bought fleet level stock at a discount and run it for a year and sold at “normal” second hand prices. That was a profitable side of the business.
With Tesla they had to buy at effectively full market price as Tesla could sell everything they make. As the new price of the cars has fallen the second hand value has also fallen, thus a significant part of their business model was disrupted.
They have been very quiet about that, blaming damage and repair costs. Since those are insured and billed back to customers I can’t see the cost problem there - other than Tesla repairs and spares are not as readily available as for a Ford Focus etc.
The ICE vehicle industry has a catastrophically high inventory level at the moment and they will have been tempted by massive discounts as they turn around their stock.
El joe
Active Member
Hard when they don’t really educate renters on using an EV, how to charge, etc. I’ve read too many horror stories.
They’re not getting rid of all of them, just some of them.
The ones up for sale are usual retirement age (2-4years/20-40K miles) for a rental company And they still plan at least 70% electric fleet by 2030.
Storm in a teacup.
I think you nailed it pretty much. What a company says and what is really going on are rarely the same.
True - they are currently selling about a third of their Tesla fleet.
They’re not getting rid of all of them, just some of them.
The ones up for sale are usual retirement age (2-4years/20-40K miles) for a rental company And they still plan at least 70% electric fleet by 2030.
Storm in a teacup.
But replacing them with ICE cars...so not a 'direction of travel' which is consistent with their stated ambition for a 70% EV fleet in 6 years time.
fholbert
Active Member
That’s going to depress the resell market even more.
For the total number of miles that I see on those few vehicles, I'm pretty impressed.
They suggest that Hertz have put multiple millions of miles on EVs. There have been a few stories, but the program wasn't a failure. I'm surprised that it did as well as it did.
I call the Hertz program a huge success. Remember, they ordered a huge crapload of cars, not a few thousand.
They suggest that Hertz have put multiple millions of miles on EVs. There have been a few stories, but the program wasn't a failure. I'm surprised that it did as well as it did.
I call the Hertz program a huge success. Remember, they ordered a huge crapload of cars, not a few thousand.
I have noticed over the last 12 months that the cheapest available rental car offered (to me as a UK based renter, using UK based online 'broker' sites) were often EV's (I have rented in Tampa, Miami and Phoenix) - this I suspect has something to do with their popularity (or otherwise!) with renters.
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Jason71
Well-Known Member
A guy did a YouTube video on a JoG to Lands End trip. Hired a Polestar 2 for the journey and if I recall correctly it was about £20 a day which is crazy. His journey exceeded the daily mileage cap so he just added a couple more days to the rental to boost the mileage allowance since that was cheaper than paying the over mileage charges!
kelvin 660
White SR+ with LFP battery
I don't think EV's are a good fit for a hire car company becuase 1) Hertz don't pay for petrol or electricity so won't get running cost savings that owners get. 2) It take longer to refill and turn around the car between hires 3) depreciation is step on EV's ATM and 4) they can't buy them at big discounts, unlike ICE cars. And that's before repair time, etc is taking into account.
Therefore it will be a while before EV's become mainstream in hire car companies...
Therefore it will be a while before EV's become mainstream in hire car companies...
pault1981
Member
I rented a Model 3 through Hertz in the US in April. It was only for two days but it also only cost me $160. I think the cheapest ICE rental at that time was about $140 so it seemed a no brainer.
Had no issues with it and it is a shame they are pulling out. The only annoying thing about renting one is not being able to use the app and the car being set to chill mode the entire time. In terms of refilling, well I just recharged before returning, so the same as returning an ICE car really.
I think the fact it was so cheap indicates they weren't renting enough of them compared to ICE cars though. I think a majority of people used to ICE cars would be scared of running out of charge etc and would just stick to what they know. Not many people want to take a gamble on something unfamiliar when on a vacation etc.
It is a shame the experiment didn't go well though.
Had no issues with it and it is a shame they are pulling out. The only annoying thing about renting one is not being able to use the app and the car being set to chill mode the entire time. In terms of refilling, well I just recharged before returning, so the same as returning an ICE car really.
I think the fact it was so cheap indicates they weren't renting enough of them compared to ICE cars though. I think a majority of people used to ICE cars would be scared of running out of charge etc and would just stick to what they know. Not many people want to take a gamble on something unfamiliar when on a vacation etc.
It is a shame the experiment didn't go well though.
Yes, but the EVs they’re getting rid of are being replaced by ICE, not another EV. They are reducing their EV fleet.
They’re not getting rid of all of them, just some of them.
The ones up for sale are usual retirement age (2-4years/20-40K miles) for a rental company And they still plan at least 70% electric fleet by 2030.
Storm in a teacup.
Hertz had originally committed to 25% of their fleet to be electric by the end of 2024. They have abandoned that target because petrol cars are far more profitable. There’s no way their fleet will be 70% electric by 2030.
Obviously a US focused decision, back on this side of the pond, I suspect the ZEV Mandate will change things in the next few years. Every car manufacturer will want to shift a large number of cars in order to avoid the fines for underselling. The fleet discounts could well shift towards EVs, especially for vehicles which aren't overly competitive (*Cough* Toyota *Cough* VW)
That's sort of true, but it's still a cost to the renter. (Some) people will factor in the fuel costs.
That's why most rental agencies are charging more for EVs than ICE, arguing that the renter will save on fuel...
I wouldn't be so sure this alone will be responsible. Hertz acknowledge that their Uber partnership of leasing Teslas is successful and is expanding. There will be a demand for these cars for taxis as they will be good for another 200,000 miles at least! They will also be very affordable 2nd hand cars - and able to get the EV IRA credit as a further discount.
Tesla launched the refreshed Model 3 in the USA three days ago at the same prices as the old models. All of the cars in the Hertz fleet will have to be depreciated accordingly. This is not Hertz's traditional market model - they are being hugely disrupted by that move. Traditional ICE cars in their fleet are on the "normal" two year refresh/four year new model cycle. Tesla don't do that as we all know.
Until Tesla prices stabilise the rental companies will not be happy, and Tesla are still reducing the COGS to produce cars. As it is, even us Tesla retail customers are seeing our 2nd hand resale value drop regularly - just look around these threads! Rental companies have not adjusted their old practices to the new ways yet, and the discounted ICE vehicles will just be too juicy a buy at the moment.
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