Hertz is dumping its EV fleet: want a used Tesla for $21,000?

[thewayne]

I mentioned this in a previous post about a German rental car company that was selling off its Tesla stock. Hertz has now decided to get rid of its entire electric car fleet and you can now buy Teslas for as low as $21,000. The final price may be lower than that: the age of the car may qualify it for further Fed (and possibly State?) rebates. Many cars have 80,000 or so miles on them, Tesla gives you 100,000 miles free charging on their Supercharging network.

But these cars have been rental cars, which means they've been driven hard, and frequently by idiots, so that definitely needs to be kept in mind.

Hertz is dumping them, specifically the Teslas, for two major reasons. But let's back up a step first. When Hertz started buying Teslas, the initial announcement was that Hertz was going to buy 100,000 units. That sent Tesla's valuation to over a trillion dollars. And it never happened. The purchase was going to be phased over time, because Tesla was incapable of delivering that many cars in one swell foop - and in the end, no where near 100,000 cars were delivered to Hertz, I have no idea what the final number was. And once the cars arrived and began to be rented, the problems started happening.

The biggest problem is the car itself: it's so damn fast. And it's not the speed per se, it's the acceleration. 0-60 in under 3 seconds? Now a Tesla BUYER may have experience with super-fast cars. They know what they're getting in to. Renters? Not so much. Dad from Podunk, USA wants to play with the toy! And shunts it into the corner and bends it up a little bit. At least he got the insurance as part of the rental agreement and doesn't have to worry about that aspect.

Except Hertz now has a bent-up Tesla that not only they can't rent, it's costing them money instead of earning it, and Teslas are infamous for taking a very long time for replacement parts to put them right after accidents! If my Subaru gets bent, which has happened on two occasions, it'll be back in service in less than a week once the parts arrive. A Tesla? It can be down for MONTHS. Most of Tesla's parts production goes into new cars, not servicing repairs. That is a lot of lost revenue! Very bad cost vs revenue equation tilt for a rental company!

That's the first major reason Hertz wanted to get rid of the Teslas.

The second is something Elon started doing last year. He started slashing the prices on his cars to move sales as they were kinda flagging. Except Hertz was on a contract, and he was devaluing the fleet that they had already purchased! This completely wrecked Hertz's financials, and they were just coming out of bankruptcy! Again, not a good equation.

So Hertz decided that electric vehicles weren't a great proposition, and over the next year or so will be dumping their fleet. This is the first tranche of vehicles being sold in the USA, it's not exclusively Teslas: there's Nissans and some other EVs represented, too.

https://www.cbsnews.com/news/tesla-cars-used-hertz-discount-ev-fleet/

Comments

[kathmandu]

I have more sympathy to Elon for the 'cutting prices' problem. That is a classic retail tactic; it usually doesn't destroy customers, so you wouldn't expect it to create problems like that.

But the 'not producing enough parts for repairs' is a way to shoot yourself in the foot, especially once the cars become known for tending to need major replacements after only a couple of years on the road.

[thewayne]

It's an interesting problem.  Tesla is actually over-producing cars compared to what they can sell.  There are massive quantities of brand-new parked Teslas in Scottsdale, just sitting there, because they can't sell them at the moment.  And the quality control on the new truck is not pretty.  I don't understand why they don't have a larger percentage of parts set aside for the service channel, but that's their call: sales channel over everything, I guess.

[elf]

Setting aside a large amount of parts for repairs would mean admitting that a lot of the cars are going to need repairs. They (and by "they" I mean "Musk") want to believe that the cars are shipped perfect, and will be handled only by experts, and any other situations are someone else's problem and the customer can deal with a long wait since they fucked up when they drove the car.

...And if Tesla sold 10 cars/year, they could get away with that. Since they want ongoing, growing sales, they can't afford for their customer service to be "what are you doing wrong with our perfect product? You can wait for the repair guy to get back from vacation."

[disneydream06]

Good luck Hertz.
But of course you know there will people out there that will jump at the chance. :o
Hugs, Jon

[thewayne]

It's an excellent opportunity if you were interested in one.  Me, ignoring The Muskbrat and everything he represents, I wouldn't buy one for four reasons.  (1) I'm not convinced they're good in snow because of their ground clearance.  (II) They're too damn fast.  I don't want a car that's that fast off the line.  If I could adjust the acceleration curve, or easily slow it down and limit top speed, then I'd be slightly more amenable.  (C) The Touchscreen.  I DO NOT want a car that has so many functions buried in menus in a big damn touchscreen that requires me to take my eyes off the road!  And (4) The fact that the door locks are electronic networked devices.  If your car loses all power, you have to use an emergency door unlock!  If you're in a panic situation, I hope you've studied that manual really well to remember how to do that!!!  As far as I know, they are the only car maker with such door locks.  There's a bunch of other reasons, but those are the four biggies.

[disneydream06]

Some very good reasons. :o

[dewline]

One more way that His Sinkness is sinking the situation.

[thewayne]

I won't disagree that The Muskbrat is clever.  Lots of people are clever.  But his superpower is money.  Plain and simple.  He didn't invent Tesla, he leveraged his initial investment in the company and forced out the guys who invented the car.  Just the fact that the names of the first four cars under his reign spell S3XY is enough to ensure that I'll never buy one, aside from the host of other reasons that I have: in that simple demonstration he's proven that he's a frat boy and not worth the time of day to me.  Add to that you can't pronounce SpaceX without saying the word 'sex'.  The guy is a complete and utter prat.

[rain_gryphon]

They (EVs in general) apparently lose their ability to recharge when the temperature is low, which many people in Chicago and the upper midwest are learning this week.

[thewayne]

Yep.  Severe cold hits 'em pretty hard.  Another reason why I'd be hesitant to get one.  For me, I think a hybrid would be much more sensible up here.  Assuming I could get the ground clearance and AWD that I need, perhaps along the lines of a RAV4 or Subaru.

[rain_gryphon]

That being said, they have the potential to be ferocious racing cars, especially on road courses. They have that same advantage of massive torque, just as the turbines did and the diesels do. And, like the turbines, they're way too fragile and high maintenance to ever be successful passenger cars,

[thewayne]

The low center of gravity because of the battery weight can certainly help in cornering. I have no idea what the weight distribution is. Amongst the things that I love about my Subaru is the Boxter engine and the 50/50 weight distribution: while it's not a sporty car, it's very nice cornering and has a cruise control that keeps speed steady descending 4500' as I go down the mountain to work. The Ford and Toyota rentals that I drove when my car was in the body shop last did not, had to use the brakes a lot.

[silveradept]

Well, that will hopefully get more people to purchase them and decide they don't actually want them, and only be out a small amount of money rather than the full cost of a new vehicle?

Honestly, at this point we're all waiting for someone, possibly Elon himself, to get bored with owning companies and unload all of them, so that someone competent can take the reins from there and hope to pull up in time before they all crash. Or get caught up in something that will wreck them because someone decided that regulations were for suckers and found out the hard way they're not.