Hertz is scaling back its EV ambitions because its Teslas keep getting damaged
theverge.com
theverge.com
The bigger problem is that their Teslas are so expensive to fix. I suspect a lack of replacement parts and/or qualified techs is to blame. Too bad, because if they had better repairability then Tesla would have a real claim to lowest cost-per-mile.
Tesla has a first mover advantage, but the “sensor integrated parts” has been tested and failed already.
This is based on getting my 2020 non-EV car's windshield replaced, the local glass shop said they can do calibrations for many cars, but didn't have the right procedures/equipment for my model.
Tesla did fix it for free though, because they weren't sure it wasn't an installation issue (no impact point, just a hairline crack running down the glass).
At those prices, I imaging the glass is as you would expect at wholesale not more than $50 or so if they can send me out the door for $140. But its not even really the price that keeps me returning every few years when invariably someone in my family gets a busted windshield, is the fact that I can call them to verify they have the windshield drive over and wait 15 mins in their waiting room and leave with a new windshield.
Safelite wanted to charge ~$500 to press that button. I fortunately went with an OEM installer and although I paid a little more for the windshield, it was less than the cost of a non-oem with the recalibration fee.
To be clear, my experience is with my Model 3, not any other brand or make. I'm not saying other cars can be auto-fixed with a button press here.
I suspect that if you were in an accident and tried to blame Tesla's autopilot or other automation for not working, they'll come back with "We have no record of recalibration when the windshield was replaced, we cannot be responsible for safety features with an uncalibrated camera system"
Your response corresponds to a lot of research I did on if I had to pay the recalibration fee or not (when I initially got a quote from Safelite) - the consensus online is mixed, but I'm speaking from my own personal experience here that I did not require recalibration tooling other than to press the recalibrate service button after my windshield was replaced and drove 20-30 miles before autopilot would be re-enabled again.
Although these are Model Y instructions, they pretty much reflect the experience I had:
https://service.tesla.com/docs/Public/diy/modely/en_us/GUID-...
The document does mention "Contact Tesla only if your Model Y has not completed the calibration process after driving 100 miles (160 km) in the described conditions.", which probably means you would need external hardware calibration tooling because it couldn't auto-calibrate.
Whatever rock it was, it was large enough to make a loud noise. But I still was surprised at how much of a crack it made. My personal vehicle (BMW) which I've driven over 200x as much has never taken that level of windshield damage on similar roads with occasional rocks.
I looked carefully at the Tesla windshield afterwards and had the OEM mark on it, so it didn't appear to be a case where Hertz had already replaced the windshield with a cheaper aftermarket one (like I'd initially suspected).
Rental car companies make their money on re-sales. That is their margin. If the new equivalent drops in price, the margin is gone.
2. Rent the depreciating asset to cover the cost of depreciation.
3. Insurance/financialization
(Resale Price + Rental Income - Maintenance - Purchase Price) / 2 years
Trick is that they generally flip these vehicles after 2 years and upsell an auto warranty which a big profit center as well. Resale price tanks and there goes all their profit.
This would also link into their "extra damage" problem.
It’s kind of disappointing if they are getting noticeably beat up after a year.
[1] https://apnews.com/article/business-lifestyle-travel-car-ren... [2] https://electrek.co/2023/02/08/hertz-half-massive-tesla-orde...
It can be lucrative, I recall the manufacturers put terms in the contract that prevent them from selling cars with less than a certain number of miles, to prevent them from just selling the cars immediately at a profit.
However with Telsa I don't think they had a negotiated price.
Too bad, because EV rentals directly lead to sales.
Ask any EV owner, and they will probably have dozens of conversations with non-owners who think it is impractical and would not fit in their life. But put them into an EV and many of these roadblocks evaporate.
Yea, no. Electric cars are the cheapest option in most rental fleets because demand is tiny, compared to ICE. The rental EV experience is terrible, primarily because, unlike owners, renters don't have a home/garage charger they can rely on. Instead you have to hope that the hotel you're at has a charger, that it works, that it's compatible, that it won't take too long, that there isn't someone else using it. And if you don't return the car 80-90% charged, you pay a fee that's more expensive than filling a typical tank with gasoline!
This author nails it: https://archive.ph/yFwEo
I typically use them for moving bulky stuff around the city and small day trips outside the city.
There's a 20 minute free credit for ending the trip at a slow charger which is usually easy to do and means the cars are usually close to fully charged.
(I still wouldn't want a surprise EV from a normal rental company.)
A person renting an EV to try it on for size would have a different mindset. Also if you rent an ev through hertz, they bombard you with FAQ emails before your rental.
The article also was a chevy bolt. I think renting a tesla is a different experience than ccs/chademo because the supercharger network is well thought out with lots of locations with many many stalls, and it is well integrated into the nav system.
Did the OP say "Tesla rentals directly lead to sales."? No, he or she said "EV rentals directly lead to sales."
They also didn't say "expected rentals only", and I can speak from experience that Hertz is not notifying renters that reserved ICE cars are oversold and upon arrival, your options are either EV or walking.
However, the point of the article may still stand if you do not drive a Tesla.
And when the rental car springs a surprise EV on you, you don't get to pick the brand.
It's not just the "utilization rate", Ubers have to go everywhere. Imagine what your own car would look like if you spent a month driving to random addresses. The Uber heatmap of a city probably covers its worst-maintained roads, on days with the worst weather.
*yes I'm sure there are some HN types who will claim they do.
:)
I got my P3D in Oct 2018 and it got bumper damage a couple months later because of a distracted driver. My car was in the shop for almost 1.5 months and the total cost was around 5.7k USD.
Thankfully insurance covered all of it and I didn't pay anything out of pocket. However, it just shows these cars are very tech-heavy and the cost of sensors and supply chain issues add up.
For me as a individual it wasn't a big deal that my car was in the shop waiting for parts shipments - I had a second car. For a business that invested in these cars having fixed assets collecting dust waiting for parts sounds like a nightmare scenario! Sure they have other cars too, but it is different scenario for them.
I still think the Tesla was a fine car especially with all the tech. Maybe not the nicest car interior and issues wise (panel gaps galore), but fun to just kick the accelerator in and SCREAM! In 2018/2019 it felt really special. Now, I feel like every 3rd car is a Tesla (I live in California) so it isn't as special anymore but that's a good thing! I sold mine a couple years ago, and looking forward to what new innovation we get in the EV space next.
Tesla's fragility and high repair costs are presumably increasing insurance prices for everyone.
It's the OG version of bully the self-driving car because they'll flinch long before you do.
I too grew up in a family with beaters. But I have a more richer friend who has some road rage in his nicer car. I've heard him "wish they would hit me" when angry because they have full coverage and no worries of a replacement car - those with a beater and worse insurance have to be extra careful since they don't easily have a replacement.
It means that you'd drive around a car which is more expensive than median at your own peril.
Though generally in tort you take your victim like you find them... and there are good reasons for that.
A counter would i can go intentionally smash up some other rich guys fancy car and only be on the hook for the cost to fix up a median car. If I've a vindictive rich guy myself, then perhaps that's a good deal. A balancing fix would be median liability unless you can show the damage was intentional and malicious, but then that's inviting everyone to endlessly litigate about intent.
There are lots of other compromises possible, e.g. only liable for x% of the amount past the median, which I think would still be strictly better than the current situation.
They have optimized their factories for assembly, but service, spare parts, and repair parts are overwhelmed. They have also been hesitant to develop 3rd party repair options, so the situation is similar to apple phone/computer 3rd party repair.
Give it 10 years, and a little willpower.
I'm mainly curious how Hertz got this so wrong.
They must have gathered some kinds of stats on Tesla repair rates per mile driven -- why did the math turn out to be wrong? Does driving an EV 10,000 miles over the course of a month damage it far more than driving 10,000 miles over the course of a year?
Or if they knew there were big unknowns, I'm surprised Hertz didn't or wasn't able to offset a lot of the risk of higher damage rates to Tesla as part of a fixed-fee maintenance contract or something.
There's always the possibility that a low-level analyst just messed up their spreadsheet, but it's hard to believe that passed executive review. When a team pitches their proposal to the execs, it's precisely the execs' job to look at the slides and challenge each and every number and say "hey wait a minute, these numbers for wear-and-tear seem in line with historical, but two slides ago you said 50% of the fleet will be for rideshare." If they missed it, that would be a gigantic failure of management.
Its not about being wrong, its about doing things that get investors to pump money into your company. Tesla is meme-adjacent and Hertz knew that making headlines with Tesla would attract investors.
Now that Hertz lost money, its not their problem. Its their investor's problem. Or perhaps more accurately: its not the Board of Directors or CEO's problem that Hertz lost money per se, they did what they set out to do (ie: sell Hertz stock during a difficult time and raise money). All the Hertz shareholders who have lost real value are... well... that's the shareholder's problem now.
Let's see them meme their way out of that one now.
It’s possible the driving habits in a rental Tesla are unique as well. There’s already the general principle, “Don’t be gentle on a rental”, but perhaps the novelty of an electric car with a unique pedal system (compared to a gas vehicle) leads to more aggressive driving?
What's the fastest car in the world?
A rental
Assuming 10,000 miles over a 30 day month, driving every day that's over 300 miles per day. That's pushing the limit of the range if not more, so they are fully cycling the battery every day. That's not good for battery life.
I mean - would they?
Tesla is famously secretive about defects, not putting anything in writing to customers and asking them to sign NDAs - so I doubt Tesla is handing out honest numbers to potential partners.
And even if they ran a small-scale trial before making a big purchase, there's a lot of ways a small trial can accidentally be unrepresentative.
That's what companies do when one can't trust the other -- they hold the manufacturer responsible for the cost of repairs/replacements rather than doing it themselves. And if a manufacturer refuses to agree at a reasonable rate, you don't do the deal because that's a huge red flag the numbers are dishonest.
Employees could have produced piles of documentation and analytics predicting massive losses, low demand, high repair costs, whatever, none of that would have changed his mind. Because of that, it's more than likely there was no analysis whatsoever. This was not an analytically-driven decision, it was an impulse buy.
Electric vehicles are now mainstream, and we've only just begun to see rising global demand and interest," Hertz interim CEO Mark Fields said in a statement.
https://www.npr.org/2021/10/25/1048953565/hertz-will-buy-100...
I was with you all the way until you revealed that it was Mark Fields. The guy that saved Mazda, turned around Aston Martin, Land Rover, and then Ford; responsible for making sure the Mustang Mach-E was produced, and then retired after decades in the auto industry.
They dragged him out of a very rich retirement, and he certainly made the mistake that Teslas are cheap/easy to operate at scale. But trying to make a name for himself - definitely not.
During Fields’ tenure as Ford CEO from 2014-17, Ford’s stock declined by about 40 percent
During his tenure at Ford, he refused to relocate his family from South Florida to the region. Instead, he initially used Ford’s corporate jet to be with them every weekend. The disclosure sparked a furor, given that Ford was ailing at the time
Fields was forced out in 2017 in the wake of Ford’s more than five percent decline in car sales.
https://www.deadlinedetroit.com/articles/29110/starkman_form...
Sounds like a guy whose reputation had been tarnished, now taking advantage of a new, unexpected opportunity as CEO to re-establish it by making big, headline moves in a short time with someone else's money.
But whatever your opinion of him, an experienced, longtime executive tasked with making big turnaround moves strengthens the hypothesis that the Tesla decision was a CEO mandate without any analysis or discussion or opposition voices tolerated.
Probably don't want to shoot their premiums considering how expensive the insurance for them already is.
On the glass repair someone complains about $1200, glass is just expensive for front windshield. I have a non-tesla that got hit by multiple rocks and cost $2400. $2400! It was an electric pickup truck. Insurance paid for almost all. Then on my tesla, last year a huge rock hit the windshield, that cost about $1200 too.
I _hate_ newer vehicles. So much fluff and I can't disable 3/4 of it.
I drove a newer Ford Escape that had a broken sensor somewhere. It has a feature called "adaptive cruise control" where it detects the distance between the driver and the car in front of them, and adjusts the spacing accordingly. It uses a sensor of some sort to accomplish this feat.
A related sensor stopped working so, naturally it reverted to the regular kind of cruise control right? Wrong! Because the feature for the adaptive cruise control stopped working, it disabled ALL cruise control functionality.
And don't even get me started on the fucking spyware built into that vehicle (and other newer ones).
Better be thankful that you could still drive :-)
Failure modes seem to have gotten so much worse during softwareization. I suppose it's something about software culture and the expectation of "that can't happen" and expecting fixes to be simple ("if this happened they'd just have to re-install").
One example that comes to my mind often since I learned about it is the Subaru module that would drain cars' batteries because it got stuck in a re-connect loop, costing many millions in repairs, brand damage and "inconvenience" (it literally bricked the car). It could all have been avoided by thinking about failure modes for a few seconds, yet the software team (likely one tired guy in the middle of the night) didn't.
Failure modes are definitely an afterthought for new gen cars with the fancy sensors - I think it's a problem with gas and electric cars.
/oblig :-D
If Tesla was able to provide the replacement parts I imagine they would have kept the car, but the waiting and poor communication from Tesla was the deciding factor to go back to a SUV.
Teslas are fairly low maintenance but still above average repair cost for sure. Related issue is parts & service backlog means above average time a Tesla rental may be out of service. There are notorious stories in Tesla forums of many many month waits for repairs after seemingly non catastrophic accidents.
There’s a thousand ways you can incrementally damage a car that cannot be detected until some time in the future.
I guess with rentals some maintenance tasks can at least be handled. I know someone who leased for three years and never got the oil changed until the day before returning it.
This is pretty easily detectable with modern ECUs.
„Don’t be gentle it’s a rental“
Everybody drives their car as if they stole them.
However I do feel the need to point out that there are currently more slaves in the world than at any other time in history. I don't mean in the idomatic sense of wage slavery or anything. I'm talking about literal slavery - forced labor and ownership of people.
Much of the stuff you buy today probably had a slave involved in its production at some point. Corporations say they can't ban slave labour from their supply chain because it's impossible for them to tell what resources had slaves involved in its production. The slave produced supply and legitimate supply of goods is too mixed to adequately track
Some reading to get started
https://en.m.wikipedia.org/wiki/Slavery_in_the_21st_century
Also genocide was very prevalent in the 20th century probably more than at any other time
[0] https://en.m.wikipedia.org/wiki/Post_house_(historical_build...
Hertz works by flipping cars every few years (2-3, depending on mileage) and post rental inspections for obvious damage. It's not too complicated.
Your daily communte is not heavy use, unless it is through Sahara or something...
- repeated short distance driving
- extended periods of idling or low peed operation
- more than 50% driving in heavy city traffic during hot weather above 90F
If you've got a commute in heavy traffic in a Southern US state or just a really short commute of only a few miles where you're not really getting things well up to temp, its pretty easy to hit these "severe" situations.
I've considered it might be overall cheaper ditching the car and renting (or ubering, which I do sometimes) when I need one, but I value having the car ready to go at an unplanned moment's notice. And I just prefer having my own car that I'm familiar and comfortable with.
But absolutely could not live where I do without my own car.
Edit: long perioda of a car not driven has the effect of not all gearbox and enhine parts being lubricated, that has a negative effect on oil as all that corrusion is ending up in the oil. That so has nothing to do with yearly millage, pulling a car out of storage every 11 months to drive 50,000 miles in one go has the same issues, and a lot more on top.
Yes, is recommended to change oil each 12 months at least
Meanwhile, all preventative maintenance (oil, etc.) is trivial to ensure happens on time and problems can be solved earlier because no one has an incentive to ignore the warnings (because a repair would be inconvenient or expensive). And they must get a great deal on replacement parts and mechanic services are no where near retail.
So is there a way for the prospective buyer to query this log?
And can't it be marked as done without doing the work?
Meanwhile, they risk damage to a car keeping them from renting it out while it's repaired. And the cost of standard maintenance is probably less than they make in the day or two it's out of service.
Fake the maintenance documentation, not so much?
Personally I tend to be 10X cautious with a rented car because I never pay for full assurance coverage, because I feel it like being robbed (the same way renting a child's seat makes you feel, I paid more for the seat that for the car itself)
Anecdotally, the folks checking over the vehicle before taking it back also do quite a poor job and miss things. A friend of mine I was helping move put a solid dent in the box of a u-haul and they didn't even notice.
I used to run 'rental cars' (aka cabs) into the ground on a regular basis just because you're not making any money sitting around waiting on a wrecker. Plus, the company generally didn't fix the cars unless they were towed in, can't even count how many times I'd swap out of a car after telling them what's wrong with it and see a message the next morning about needing a passenger rescue on that car because the mechanics just sent it back out without even looking at it beyond "well, it starts and drives around the yard".
The last cab company I worked for had an unofficial policy (on 'voucher' trips which were billed to insurance companies and whatnot) that if you got the passenger in the car you'd get paid for the trip so if you have a $100+ trip on your screen and the car can somehow limp to the pickup address then this what you do without worrying about what it'll do to the car...
I didn't intentionally tear up the cars but after a while I learned what a Prius could take. No AC in the Arizona summer, straight back to the yard. Car makes a big thumping noise taking off from every stop, probably be OK for a day or two before finding a better car to swap into.
Can't imagine rideshare drivers care any more about the cars than I ever did.
Low-octane gas will cause problems in older carbureted cars, but most cars sold in the last thirty-or-so years will not have this problem.
Usually yes.
Certain sports cars with turbos or superchargers mandate 6 month service periods for their engines. And you need to abide to that if you don't wanna void your warranty.
This is a scam by the auto industry.
If they hadn't set prices to account for that risk, the rental companies would have all gone bankrupt decades ago.
https://github.com/teslamotors/fleet-telemetry/blob/main/pro...
Huge mistake. Like my last electric rental, in Northern California, over half the chargers I tried to charge at were out of order for some reason. All the charging station apps suck, and there's like one super charging station on I-95 in between CT and Boston. The drive back took three hours because I was super careful to keep the charge in green. Just as I entered the Boston tunnel, the car went into "limited propulsion mode."
Next time, I'm just going to uber everywhere and cancel long drive plans if I have to get an electric.
I bring it up because I see complaints from people with money that EV's don't fill their use cases 100%. No offense it's a privileged position. Where you spend an extra $10-20k for a car that does everything you might want just to ditch the inconvenience of renting something for that last 5% use case.
But then I realized that if everyone has EV’s and they all use this rental strategy, burst rental prices will be insane.
As it was I just drove it locally but I wasn't doing that enough to justify the cost given lack of commute even before pandemic.
The ordeals began long before we arrived at BWI.
I forget the reason now, but I didn't trust Hertz with the reservation for the Y. Even though the site said yes we have them and your Y reservation is GUARANTEED! It was weird because the Y was cheaper than renting a 3. And something just didn't seem right. So I was determined to call. I didn't know their number so I went to their website.
Hertz's website was full of problems, like, no way to find out the phone number for customer service. If you clicked on the Contact Us page, it led to some customer-avoidance links like most companies nowadays have, where, here, talk to our useless bot, or here, peruse our Knowledge Base, or here, read our FAQ, but no phone number. And when you finally found a link to a phone number and clicked it, you wound up at a 404 Not Found page. (I finally got the number from Google.)
When I talked to a human at Hertz I asked to double-check on the Y reservation. They said oh yes, all is good, you're all set, yadda yadda.
Day we arrive, big long line at the Hertz counter. One employee behind the counter (this counter is like a football field's width wide, with workstations every few feet, so they could easily fit 25 employees each taking a customer. But no. One.) We eventually get to the employee. I give my name, tell them I'm here to pick up the Y.
Sorry sir, there's no reservation here for a Y. Let me check something. She then walks away. A minute goes by. Two minutes. Five. Ten. Suddenly some dude in a Hertz uniform comes out. Obviously the bearer of bad news.
Sorry sir, we have no Model Ys. Well we have 25 of them but none of them are available, they're all at the Tesla shop and we don't know when they will be available.
But, you guys said yesterday on the phone that yes my Y was guaranteed, reservation is all set, all is good, etc.
Sorry sir, no Ys. We have plenty of 3s though.
Crap, I didn't want a 3, but we decided to take the 3. That took the employee 15 more minutes to process at the computer. HUGE LINE now backed up behind us, while this guy takes his sweet old time finishing what should have been a 30-second task. Finally we're told where to go in the epically vast parking garage for the car. It's in spot number 325 or something. We look on the ground . . . we're at like spot number 1, 2, 3 . . . we keep walking, we cannot find the car.
I ask a Hertz employee, where would spot 325 be? He looks at me like I'm an idiot, and responds in a tone he reserves for people he thinks are idiots: it's next to 324, right over there, and I'm looking and I only see spots in the 200s. Employee mutters "what an idiot" or something and walks away.
We eventually find the 3, among many 3s, at the extreme far end of this garage that is easily the size of an airport hangar that could fit a dozen 747s.
We get in, and it's the first time I've driven a 3... even though I'd driven an S for ten years. Tiny car in comparison, everything on this little toy screen (compared to the mighty S's) and in a different place.
We thought, we've had a Tesla for ten years, and we're not quite sure where all the settings are. What about brand-new customers who've never driven a Tesla or even an EV before?
The entire customer experience at Hertz was F-A-I-L. Just terrible. It's like the workers hate the cars. And I can imagine Tesla's service is a total nightmare for Hertz as a fleet owner.
Tesla doesn't get customer experience either. Hertz has become so awful (at least the BWI Hertz) we can't imagine renting from them again.
I think there's blame all around.
Do better Enterprise, Budget, Avis, etc. Somebody, do better.
I've always wondered what kind of software they're running on those terminals. It's like the employee is trying to hack into the mainframe, and manually execute some SQL queries.
I haven't used them in a while, but Avis always kicked Hertz's ass all over the map on customer service.
Hertz only had the advantage that they were bigger. Nothing else.
https://abc7.com/turo-car-destroyed-monterey-park-rental/139...