How is that possible? They make money on buying new cars in bulk and then selling them as used cars? I’m struggling to understand how flipping a depreciating asset is a profit center.
(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.
2. Rent the depreciating asset to cover the cost of depreciation.
3. Insurance/financialization