Hertz will sell off a third of its all-electric vehicle fleet in the U.S. as a result of lower-than-expected demand and the high repair costs of EVs. The rental car company will reinvest funds from the sale to bolster its gasoline-powered vehicle fleet.
Back in 2021, Hertz announced an order for 100,000 new Teslas, while last August, the company said it would add the Cadillac Lyriq and Chevy Silverado EV to its EV rental fleet. In September, Hertz said it was poised to order 175,000 new GM EVs over the next five years.
Now, however, according to a recent report from Bloomberg, Hertz is in the process of shrinking its EV fleet, with plans to sell 20,000 EV units total. The company’s EV sell-off began this past December. EVs previously made up 11 percent of the rental company’s total vehicle fleet, with 80 percent of those EVs wearing a Tesla badge.
“The company expects to reinvest a portion of the proceeds from the sale of EVs into the purchase of internal combustion engine vehicles to meet customer demand,” the company said in a recent regulatory filing. The rental company added that this move will “better balance supply against expected demand of EVs.”
According to Hertz CEO Stephen Scherr, Tesla’s recent price cuts raised the rental company’s depreciation costs. It was also indicated that EVs had higher repair costs compared to the rest of Hertz’s fleet, which hurt the company’s bottom line and contributed to missed third-quarter earnings estimates.
According to the recent regulatory filing, the EV sell-off should improve the rental car company’s cash flow and earnings in 2024 and into the 2025 calendar year, with improved financial results thanks to increased revenue per day, lower depreciation, and lower operating expenses by the end of 2025. Hertz expects incremental free cash flow of up to $300 million over the next two years.
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Comments
Good!
But but but, MaryJoe said EV’s are the answer and the future????? LOL.
So does the CCP. And they are insistent you become dependent on them.
Carl, Teslas have always cost a small fortune to repair.
That is the ONE thing I can’t leave at Barra’s door step. She has plenty of other Guffaw actions. But I admittedly like her very reasonable BOLT pricing since I bought a new one yesterday.
Total cash required including sales tax, $3,450 – and I get a brand new car. Larger battery by about 8%, free fast charging connection (was a $750 option on my 2017 Bolt), nicer seats, and got rid of that Oriental Styling which Americans don’t warm up to very much, free $500 fast charging card. Good deal.
“It was also indicated that EVs had higher repair costs compared to the rest of Hertz’s fleet, which hurt the company’s bottom line and contributed to missed third-quarter earnings estimates.”
I’ve seen MANY articles (not here) that claim EV maintenance costs are lower compared to gas cars, but in practice I’ve seen anecdotal evidence that indicates it’s higher. I wish Hertz let us know what is going wrong in these cars necessitating higher repair fees.
Repair costs as indicated by Hertz relate to damages to the vehicles and have nothing to do with regiular maintenance costs.
Ev Advocates also assume that you are taking your car to the dealership and paying $100 to change your oil multiple times a year . They assume you are having break pads put in at the dealership vs. EV use energy capture to reduce break wear.
They avoid the cost of repair for damage . The avoid the big cost of replacing battery after 5-7 years.
They avoid the increased insurance costs.
Good point me and most other car guys change their own brakes and oil. In fact I do all of my own maintenance except for AC and AT work. Neither of which has been needed. I do the same for both daughters’ cars as well.
This has nothing to do with maintenance of cars. Hertz services its own cars for common maintenance. What it doesn’t do is repairs. Tesla repairs are expensive because they have to be done with Tesla parts and authorized service centers. You just can’t order a part like you do for legacy makes and install it yourself.
I find it extremely flawed this incorrect thinking that EVs require zero maintenance. They may not need oil changes (which like you said, assumes people spend $100 on oil changes, which I don’t because I do my own and spend only $45 for a box of 6 quarts of Mobil 1 at Costco and I only do it twice a year), but the cars still need about every other necessary form of maintenance. Tire rotations, alignments (I would argue are even more important in an EV because of the extra weight), servicing the AC system because now not only do they need to cool, but also heat as they are heat pumps in EVs and can’t use the coolant from the engine, brakes (I’m sorry. but I have driven a Model Y in the highway with the regen on max and still found myself having to use the mechanical brakes quite often. Maybe not as often as an ICE but I still see these cars needing brake work). And if you live in a snowy area, you better be investing in keeping it clean, washed and waxed if you don’t want the pain to start fading. At the end of the day, they are machines exposed to the elements and will need some sort of maintenance if you want them working like new.
So now if the general thinking is these cars need no maintenance at all I am even less inclined to entertain getting a used one. Because people apparently think they need no maintenance whatsoever.
I just bought a Bolt 2 months ago and I researched EVs a lot before that. No one ever said EVs require no maintenance. What they do say is they require a lot less maintenance – no exhaust system components, brakes need changing less often (no one says they never need changing), no engine tuneups. 85ZingoGTR, you’re making an argument against a non existent claim and shouldn’t worry about getting a used one.
I have read that EVs wear out tires faster – what we need is well researched evidence based on real experience of maintenance costs, which will accumulate over time. But the maintenance schedule for the Bolt is for a tire rotation, lube and multi point inspection every 5,700 miles or 12,000 KMs and then changing air filters and a few other items now and then (22,500 miles or 36,000 km for the air filter), brake fluid every 5 years, air conditioning maintenance every 7 years, etc. One person I know who has had one for years says it’s required much less maintenance than his ICE cars did.
Regarding battery life, opponents claim they will last 4 to 7 years; proponents claim they should last more than 10. The warranty is for 8 years so I imagine they are likely to last at least that long and my bet is they’ll last a lot longer. We have a local battery researcher who is one of the top 5 or so in the world I’m told. His team have developed a “million mile battery” that can be recharged so many times it could power a car for over 1 million miles. That’s only under lab conditions in a narrow temperature range. He says they are very close to changing the chemistry enough so it will last that long under real driving conditions like -40 deg C to + 40 deg C (-40 deg F to 104 deg F). The future will no doubt be electric in my view as battery costs go down and range goes up.
I’m about to have my first dealer service (2yrs) on my BMW i3s EV after 40,000 miles. Ran summer and winter tyres, replacing 1 pair of rear summers in that time. Brake pads are fine as is the rest of the car.
At service BMW will inspect it, change the brake fluid and swap the cabin filter. I suspect they will also replace the front shock mounts under warranty as there is a small clunk at the front end when turning which appeared a few weeks ago.
In the same length of time my previous car (M135i) would have had at least 3 oil changes, a spark plug service, a full set of (more expensive) tyres and had new discs and pads.
Purchase price about the same, road tax £0 vs £240, insurance about the same. Fuel cost, my 140 mile commute was £27 now its £2.70.
Hertz disclosed that higher repair costs were ALSO directly related to accidents at a much higher rate. Excessive speed and renters who were unfamiliar with EVs. Putting the Telsas back together was expensive!
Hertz blew it. ANOTHER case of auto execs rushing to judgement and unfounded.
Eh, gm has blown it.
Did you read the part where EIGHTY PERCENT of Hertz’ EV fleet is Tesla? Has zero to do with gm and EVERYTHING to do with inconvenient facts across the EV spectrum. The problems are intrinsic to EV!
I agree with you. Which is why I think gm blew it going all in on their “All EV future”. It’s nonsense.
My college roomate rented a Hertz and got stuck with a Tesla once (he works on tug boats as a captain and has to often fly down to Houston from his home in Pittsburgh to catch his tug). He literally told me 1) He was extremely pissed off because Hertz handed him one with only 30% charge and he had to waste time looking for and sitting at a charger. 2) At 2 in the morning, figuring how to use basic functions in that car was a nightmare. He went from having a little bit of interest in an EV to completely losing interest in ever having one.
85ZingoGTR comment mentioned that for many people, driving a Tesla for the first time is frustrating. On WBBM business news program today, they also mentioned that this is a problem if you are unfamiliar with Tesla. Their guest speaker said that he landed at an airport, got into his Tesla rental (his first time in a Tesla) and then went back to Hertz and left in a Nissan. He didn’t want to spend the time to figure out how everything in a Tesla functions.
The ergonomics in these cars are a major problem. I remember test driving a Model Y (just because I wanted to experience one and see what all the fuss is about with these Teslas) and after returning to the Tesla “dealership” I couldn’t figure out for the life of me if the car was properly turned off. I went inside and asked the Tesla “salesperson” if the car was off. It turned out it wasn’t because you need to turn on a setting in order for the car to shut off automatically. So if this was a car I rented and drove it to a hotel on say a business trip, I would have possibly woken up to a dead battery. But I think for most people, its the simple hassle of having to look for charging stations just to wait hours for it to charge where they just don’t want the hassle. I took a cruise to Nova Scotia, and I rented with Hertz. When I got there, they only had Model Ys. I canceled the reservation because A) I needed a vehicle for 6 people and they failed to reserve me a minivan and B) I had only a limited amount of time in the port and was not willing to waste much of it waiting for the stupid Tesla to charge.
Haha. How funny. On another site reported the exact same story, but the way it was written and the take away couldn’t be more different.
According to that site, they (Hertz) was phasing out many of the Tesla’s that they had acquired in 2021/2022. Much of this was due to normal age and miles and now that vehicles have way more inventory than 3 years ago, they are updating the fleets. But they are NOT going fully away from EV’s and part of the statement from Hertz said that this has been a good move for them. They will be getting more EV’s, but they will also use part of the money to increase the ICE vehicles. Again, much of this is due to available inventory. Lastly, does anyone truly think that building your rental fleet with Tesla’s was the best move? Not at all. Rentals need to be a more common type of vehicle that many drivers can become familiar with very quickly. Tesla is NOT the best brand for that.
But the spin from this GMA article and the many bellowing anti-EV comments to follow with be quite interesting. But don’t let truth and good journalism get in the way.
Yea the spin is hilarious because one quick search shows a ton of Tesla’s with 50k to 80k miles on them. The timing of these cars needing to be sold will work out perfectly for them to buy the Blazer and equinox models when production finally ramps up.
@Toney cross
Exactly. Just FUD as usual
Since when is Damage Cost the same as Regular Maintenance cost? (Tesla needs to correct this as soon as possible but to their slight defense, body shops currently do not want to spend the money to become EV certified)
They will purchase the new and Much cheaper to purchase Model 3
They are also purchasing Model Y vehicles as well.
They will also purchase EV’s from other Manufacturers and fund charging infrastructure for their customers to use. They will also use some of the funds from the Model 3 sales to purchase some ICE vehicles as well.
Yeah sounds like they are done with EV’s Lol
Read the SEC Filing. Like how long do people think Rental Companies hold onto to vehicles for?
Hertz did in fact lose more money on their early Model 3 purchases than they originally thought only because Tesla slashed 10K from the Purchase price in that time frame.
Nice spin from the spin Doctors
According to Hertz itself, never read the commentary, always read what the company says itself, they are phasing out Tesla’s because the cost of repair was too high. They continue they will likely shift future EV purchases to lower cost EV’s. Which explains why tesla stock price took a hit. It nullifies tesla’s argument that they are less expensive to own. Not necessarily all EV’s, but certainly tesla. I’d also point out that cost of maintaining a car is much more than the ICE engine. AC, power windows, power tailgates, doors that open like a bird(X), infotainment systems, steering, bearings, … are present on all cars. And people with heavy feet will likely be replacing more tires on EV’s with the added torque and weight.
Watch the interview. The CEO clearly states it was due to three reasons – #1 they bought the cars before Tesla dropped their prices and were upside down, #2 collision repair (not maintenance) was higher than they thought, and #3 demand for all EV rentals was not as high as they projected. All are valid business concerns and they are selling ~20k BEVs along with another 100k ICE cars per the usual upgrade cycle. Most people that want to rent a Tesla when traveling use Turo for 1/2 the price of some Hertz sh!itbox (or overpriced beat up Model 3) without the hassle as these are privately owned cars.
Another site this morning reports that Toyota is recommitted to ICE vehicles focusing on developing new technologies to fight carbon emissions. I think this goes to show or is more proof that not everyone is on board with EV’s and there will be a market for ICE vehicles. I wonder if GM will back peddle on this pledge to go all electric by 2035 and stop producing ICE vehicles.
Toyota went from leader to laggard with EVs. Years ago they invented and made popular the hybrid with regenerative braking then in recent years has led lobbying efforts to stop governments from mandating increased EVs. A sad story. They’re trying to catch up now but still reluctant if this comment is right.
@bg-ns
Toyota did not INVENT the moderm hybrid. That is a U.S. invention by Victor Wouk (his prototype was a Buick), who has the official credit. Look up his name and read for yourself. Only Ford stood up to follow his invention and make hybrids for America one year after Toyota did. And Ford is the best hybrid builder in the world.
Part of Hertz’s decision was that demand for EV’s isn’t living up to expectations, again shows that not everyone is on board with EV’s. Being force fed EV’s is not going to work. I applaud Toyota in its decision to recommit to ICE vehicles and development things to deal with the carb emissions issue.
You are right Dan B. And the proof is in the number of thumbs down you got. There is a high number of Mary / EV haters posting on this site, including the journalists. It is funny to read these comments though.
Belo: Thanks, but who cares about that? I guess some do, but I simply say what I know is true and/or what my opinion is. I don’t even have a problem those who dislike EV’s, but I do have a problem with them posting lies and totally inaccurate information just because they hate them. Lastly, I’m not an ICE hater and I proudly own two older Cadillac cars with gas power. The ICE will never fully go away (at least not in my lifetime yet), but EV is the future and denying such is silly at best.
So they can give me a million down votes if it makes them happy. lol.
EVs are the future but the future doesn’t mean immediate.
TangledThorns – No they are not. They can’t produce enough electricity to charge them, unless they build nuclear plants which isn’t going to happen.
The propulsion at the wheels will ultimately be electric but the power source won’t be batteries. I’m still putting my money on hydrogen fuel cell. And I think the Japanese brands (who are also very skeptical of EVs) are thinking the same.
The only cheap way to make hydrogen is through Gen IV Nuclear Plants which have as yet to be perfected.
Meanwhile, I don’t feel like paying twice the price of gasoline for an ‘electric drive’ Hydrogen fueled vehicle, especially since there are no dispenseries within 2,000 miles of me in the States.
I now have 3 full BEVs which I usually charge at home, and usually at fast chargers when on vacation. For the next 3 years, I’ll just use my FREE FAST CHARGING CARD obtained with purchase of the Electric Vehicles. After 3 years, yes the refueling price at fast chargers is triple the cost at home but vacation miles per year is only a few percent of the total number of miles I refuel at home, which is over 9/10’s of the time.
As far as KILLING THE GRID, what with 3 BEVs simultaneously charging occasionally, I usually recharge at 110 volts at 0.9 kw or sometimes 1.4 kw if I’m in somewhat of a hurry, or 7.6 kw only in emergencies and then only 1 vehicle. The 1.4 kw facility has its own receptacle as does the ‘220’ receptacle for the fastest charging (which I rarely use).
So, for all the Cassandras here, my ‘grid impact’ is precisely the same or a bit less, than my 100% ICE next door neighbor’s 2 – 1,500 watt room heaters he constantly uses to drive off the chill in 2 cold rooms during the winter time. I handle that problem passively with high value, judiciously applied insulation. Vastly shortens run time of Central Airconditioning on hottest summer days also, and solar powered roof ventilation makes the roof last another decade before the needed replacement.
By the way, the only INFRASTRUCTURE changes I needed was an additional #12 gauge 20 ampere 110 circuit to the garage, with can charge 2 evs simultaneously at 8 amperes each. Already had a vestigial 20 amp 110 and a 40 amp 220 volt circuit which I had pressed into service earlier. 220 charger uses 30-32 amperes only.
My electric service is the same 65 year old 100 ampere service my nice house has always had. Plenty of juice left over for the whole house central air conditioning, Three 3 – 3 horsepower extra large hot tub pumps, and dry electric Sauna.
Natural gas available at my house (as it is in the majority of the USA), so I use that facility for almost all my heating requirements since such a great value, and CLEAN. Only makes desperately necessary PLANT FOOD.
Why would anyone want to spend part of their rental time at a charging station?
Validated again, EV’s are just a niche market. They are not ready for prime time.
U S A 1, you are correct. In my state, new natural gas pipelines to generate electricity are off limits too.
Northeast has a problem from what I understand. No new pipelines and the Everett LNG terminal is going away. NE could see more blackouts once the terminal goes offline in May 24.
EVs are here to stay. The kinks are being ironed out, infrastructure being built out along with other alternative sources of power still in play. Everything evolves and ICE is on the way out. Change and adapt or die.
The issue of this article may very well be the long term unreliability of Tesla vehicles. There is opportunities for those with vision to step in, be better. GM?
LOL
Quiet here next week. EV groupies won’t want to talk about cold weather performance in Midwest freeze-out. lol .
Quite the opposite. The EV haters will have a field day/week.
Phil: You mean like the +/- 20% drop that ICE vehicles have in those same colder times? Got you.
I grew up in that same mid-west. I drove many miles in gas and diesel vehicles in sub-0 weather. So stop trying to act like the range loss is just in EV’s.
Who said anything about range loss? How about defrosting frozen windows, staying warm in the vehicle, and what have I heard about 30 min “battery pre-warmup” for a frigid electric ?
And in an ICE at 20 below 0, I still have more range than a stupid EV in Orlando. So much for range loss in an ICE .
Well Phil, not sure where you are getting your info from or who you are listening to, but many EV’s have a heat pump which is more efficient in an EV than not having one. But the heater in the non-heat pump EV’s is really no different from turning on an electric heater. Unlike ICE powered vehicles where you need the engine to run a few minutes before the water temps are even close to pumping heat, the EV is like that electric heater which can blow heat nearly instantaneously.
What’s more your comment said: “talk about cold weather performance”. So if you were not referring (at least in part) to range, then what “performance” are you speaking of?
Bottom line? I get in my Chevy Bolt and if I’m cold, I turn on the auto climate and set the temp at 72. I have near instant heat and it will cook me out. I also have the heated seats and steering wheel if needed. And finally, one of the nicest things you can do with an EV is keep it plugged in and remote start the vehicle to pre-condition the cabin. Doing it that way uses little to no battery range.
Let the free market work ! . You can’t sell what poeple don’t want. Hell you can’t even rent what poeple don’t want .
I had heard HERTZ was letting bare bones model 3’s go for $16,000. Great deal for anyone who picks that up.
I hemmed and hawed over it, but finally decided to let go my very nice2019 premier trimmed VOLT with 53,500 miles and after dickering with the dealer yesterday, got $16,279 trade in.
Purchased a QUITE RARE in NY State 2023 New BOLT 1LT EV, – $7,500 fed, and $2,000 State discounts, both immediate point-of-sale. With Sales tax. had to pay $3,450. This is what drove my decision – brand new car for Pin Money.
Hated to part with my VOLT since it was and is a great car. Worth more than HERTZ Tesla model 3’s that are 2 1/2 years newer, apparently. The next guy down the line with get a great value, and very versatile car.
Someone here hates honestly GREAT DEALS. Its to be expected.
Bill: That’s fantastic. Great job and I truly hope you enjoy your new Bolt EV 1LT just as much as I enjoy mine. I’ve had mine for just over a year now and this may be the first car that I’ve ever owned that I still like as much today as the day I drove it off the lot.
Hi Dan B:, Thanks…
Yeah about $10,000 cheaper than my 2017 Bolt, with nicer seats, free fast charging facility, 8 percent larger battery…., and a free $500 fast charging card. Too much $avings to pass up. After paying over $1 million in taxes over the years, Its nice to get a token amount back. Bare bones model – only option was heavy duty floor mats.. But I like basic no-nonsense cars.
Have fun, lab rats. I’ll wait at least another 11 years while you guys pay the price to workout the bugs .
hertz complains up front turns around and sells 2021 80 thousand mile cars for over 22 thousand some way higher. STOP CRYING!