Tag Archives: Hertz

Want A Good Deal On A Used Electric Vehicle?

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On Tuesday, Autoblog reported the following:

Electric vehicles were already considered unappealing by a section of the car-buying public. Now their image could take another hit as rental giant Hertz dumps 20,000 of them, mainly Teslas, for gas-powered cars.

Hertz, the largest U.S. fleet operator of EVs, has blamed the sale on high repair costs and weak demand for the vehicles it offers on rent.

Analysts and industry experts believe the move will affect the second-hand market for EVs and dissuade buyers who are already rethinking big purchases due to higher borrowing costs.

“The larger impact of Hertz EV fire sale is the perception hit to the technology,” said Karl Brauer, analyst at used-car aggregator iSeeCars.com.

“Mainstream consumers are already hesitant to buy an EV, and this news only supports their concerns.”

The higher costs associated with repairing EVs stem from a lack of sufficient expertise in dealing with such vehicles and challenges in getting the replacement parts as they are still very new, industry experts said. 

Hertz CEO Stephen Scherr flagged elevated costs caused by damages to certain EVs, particularly Teslas, last year at a conference. In announcing the liquidation of Hertz’s EV fleet, Scherr also blamed the high repair costs on Tesla for not offering to discount bulk purchases of replacement parts the way other automakers do.

Tesla and Polestar, whose cars are popular with car rental firms, did not respond to a request for comment. Car rental firms Avis and Enterprise also did not respond to a query on their EV strategy.

I love the concept of an electric vehicle. I love the idea of being able to park my car in the garage at night and have it fully charged in the morning–never having to stop for gas. However, I worry about fire danger–I don’t want my house to burn down because I didn’t want to buy gas. I also worry about the rising cost of electricity and how economical an electric car would be in the future. I also worry about having to spend thousands of dollars to replace a battery on a used car. Until those issues are addressed fully, I will simply stand back and admire the acceleration that comes with an electric car.

Tell Us Something Without Actually Telling Us Something

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Recently WWAYTV3 in Wilmington, North Carolina, reported that Hertz is cutting back on its rental of electric vehicles.

The article reports:

Hertz, which has made a big push into electric vehicles in recent years, has decided it’s time to cut back. The company will sell off a third of its electric fleet, totaling roughly 20,000 vehicles, and use the money they bring to purchase more gasoline powered vehicles.

Electric vehicles have been hurting Hertz’s financials, executives have said, because, despite costing less to maintain, they have higher damage-repair costs and, also, higher depreciation.

“[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.

“The MSRP declines in EVs over the course of 2023, driven primarily by Tesla, have driven the fair market value of our EVs lower as compared to last year, such that a salvage creates a larger loss and, therefore, greater burden,” Scherr said.

Simply put, people are generally willing to pay a certain amount less for a used car than for a new one. As the price of new car goes down, that also pushes down what people are willing to pay to buy a used one.

As of now, electric cars are not the answer to green energy. There are serious ethical questions about the mining of the lithium that is used to make the batteries, and there are safety issues–don’t try to evacuate from a hurricane in an electric car if the puddles you are driving through contain salt water–that can cause the car to ignite. Iceland successfully uses hydrogen as fuel for its busses. There are other options for cutting pollution than electric cars.