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Comment by 1970-01-01 | Hacker News Reader

1970-01-01

This is due to high body damage repair costs and has nothing to do with repairing an electric powertrain:

>Let me share a bit more context on the damage equation. First, while conventional maintenance on electric vehicles remained lower relative to comparable ICE vehicles in Q3, higher collision and damage repairs on EVs continue to weigh on our results and negatively impacted EBITDA. For context, collision and damage repairs on an EV can often run about twice that associated with a comparable combustion engine vehicle. Second, where a car is salvaged, we must crystallize at once any difference between our carrying value and the market value of that car. 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.

https://ir.hertz.com/static-files/75a583c0-90e0-496a-8b45-9f...

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where a car is salvaged, we must crystallize at once any difference between our carrying value and the market value of that car

Hang on though, this part has nothing to do with repair costs. This just sounds like an accounting issue, right? If anything I would expect this to benefit Hertz since they could write off the higher loss in their taxes immediately, instead of waiting until future years to write the value off via depreciation.

On the other hand, I can see how this would make their numbers look worse at a glance since it shows up as though they lost money, but in fact no actual assets have been lost; they have the same car, it was repaired, and the repair was paid for by insurance, but now it looks like they took a loss because an arbitrary accounting rule forces them to adjust their balance sheet in a different way than they would otherwise.

Not sure if I'm understanding this right but it sure sounds like Hertz is flat-out admitting that they're making sub-optimal business decisions to make their numbers look better. Wouldn't that be a blatant violation of their fiduciary duties?

You may have discovered one of many reasons Hertz has been skirting with bankruptcy...

I would imagine the difference would manifest itself in higher insurance rates. You can't just "write off more value" for free.

Hertz self-insures.

And that's why it really Hertz them.

One of the reasons large rental companies self insure is so that they can do repairs in house without listing cars as salvaged. They make it back on resale I think I read this from car dealership guy.

That's (yet) another reason why I don't buy the insurance that covers incidents of my own fault for my beater. A crushed bumper will deem it salvage and the insurer will take it away but I could still drive it (and from a relative's experience, at much lower cost than the insurer would pay).

But on a newer vehicle, it takes a lot of damage to get branded salvage.

Also makes sense for Hertz to do it in-house as they'll have a somewhat standardized fleet. Can "borrow" a rear bumper from a vehicle in for more serious heavier-duty front-end repair to get at least 1 back in the fleet.

> That's (yet) another reason why I don't buy the insurance that covers incidents of my own fault for my beater.

Insurance companies still make you pay for everyone else's coverage.

ref: https://www.washingtonpost.com/business/2023/09/05/auto-insu...

Less so when you opt out of portions of it and self-insure. Not recommending anyone opt out of personal liability when that's an option.

Oh, well in that case higher repair costs will hit them directly.

Right but the part of the argument I quoted had nothing to do with repair costs: they were making the point that changes in FMV due to EV prices going down in general were forcing them to recognize bigger losses in salvage situations, since they have to re-value the car post-salvage based on current market prices.

So in this case they are basically writing off more value “for free”, because the loss is coming from a genuine loss in value of the asset, but since the asset is a car that may still provide the same amount of value back to Hertz and still last the same amount of time, it’s sort of a weird corner case where you could argue they haven’t really lost anything.

Of course that loss is offset by lower depreciation losses in the future, so it’s not like it’s coming out of nowhere.

even if it were true, aren't they exacerbating the issue by "crystallizing" the loss on every single EV rather than just the ones that are salvaged? hardly seems like a reason to sell-all.

Yeah that’s also a great point, I hadn’t thought of that, but it does blow a pretty big hole in the argument.

When a car is salvaged (i.e., declared a total loss), that means that the insurance company has taken possession of the vehicle, offering the insured the market value of the car for their loss (where market value is the value of the car in its salvaged state). The car that was worth $X on their books is now $Y in cash, and $Y is usually significantly less than $X, because salvaged cars are usually worth way less than a normal used car (though sometimes the car is worth more as spare parts, for uncommon vehicles or for models no longer in production).

This obviously decreases their margins since the insurance premiums go up. And if they self insure as the other guy claims, then the repair costs come straight out of their wallet.

I can’t imagine the premium for a cybertruck.

Right, that’s true on the “higher repair costs” side of the original post, but I’m talking about the “market prices have gone down so we have to recognize bigger losses on salvage” aspect later in the post, which is caused by changes in fair market value and doesn’t have to do with the cost of repairs.

Insurance is not free money. Hypothetically say I was losing a car once per month… then my premiums would reflect that. The purpose of insurance in that hypothetical would be to insure against losing 2 cars per month but I would be paying for that first lost car in full because at that point, it’s not a risk… it’s a consistent monthly cost.

This stuff tends to be very complex. Writing off losses early doesn’t always help you. This is why depreciation rules are flexible and losses can be carried forwards.

For a public company with steady growth I imagine you generally want to amortize losses over a fairly long window. Also if you already had losses this year, and think you’ll grow more in future years, you really don’t want to book more losses now! Hertz has been getting hammered recently. Especially problematic if these are lumpy losses which will make profits less predictable. You’d rather smooth those out and hit your earnings forecast. (At least, that’s the CFO’s mandate.)

It gets even more complex when you consider the interplay with windfalls and rapid growth, but you can probably assume here that they are optimizing for short-to-medium term stock price (1-5 yr). Most CEOs don’t invest in 10yr bets. You might get fired for lackluster growth before that pays off!

More generally, “fiduciary duties” is generally construed pretty loosely. Delaware corporate law defers quite strongly to the corporation; if they can make a coherent argument for why they are benefitting shareholders they tend to get the benefit of the doubt.

Gigapress mono frames don’t like damage. Even light damage. The whole car is totaled when a comparable ICE build process can be repaired for modest costs. More of a Tesla problem than an ev problem.

The title says "EVs" but really it's "Teslas" they're not selling their Polestars.

Reuters included Polestars.

At the moment only 636 Teslas for sale. https://www.hertzcarsales.com/used-tesla.htm

Out of 675 electric cars on sale. We will see.

Had an awesome experience with a Hertz Polestar in Italy last summer.

The trim was basic, but the suspension was superior to a Tesla, especially on Italian roads.

Road noise was average at highway speeds with the cheaper trim.

Agreed. Got a Polestar for a surprisingly cheap price on Hertz recently and I was really impressed with it. If I were in the market I think I’d take it over a Tesla.

Ooof. I own a Model 3 and was really looking forward to my Polestar 2 rental in NZ over the holidays. It felt like a massive downgrade in pretty much every way to me. The biggest thing was the responsiveness, it was on par with a standard ICE vehicle in terms of how sluggish it was. I was incredibly disappointed given that I would love to look elsewhere (from Tesla) for my next vehicle.

Yeah, I rented a Polestar from Hertz and this was my takeaway too: less fun to drive than my 3, clunkier control surface and not particularly better in any noticeable way.

I rented a Tesla from Hertz recently. The throttle response was incredible. Everything else about the car was truly awful. Opaque touch UI. Fiddly steering wheel buttons with unclear functionality. Dangerously unpredictable self-driving. Insistent seat memory that constantly tried to crush me on entry. Had to install an app to unlock the car. Really a terrible vehicle.

A friend of mine rented a Kia Nero EV and it was excellent. It’s just a car that happens to be electric. I didn’t even realize it was an EV until the third day.

I do tend to agree that a lot of peculiarities of Teslas are unnecessary and/or bad, but for what it's worth most of the ones you listed are less of an issue for a vehicle that you own. Unlocking with the phone is convenient, you tie seat memory to the user, and you learn the button functions. (Some aspects are still definitely stupid, like the intermittent wiper function, the auto high beams, and autopilot on anything but clearly marked highways. And of course the lack of stalks on the new ones.)

Anyway, they're a terrible choice for a rental fleet. You want rental vehicles to behave as much as possible like the average vehicle, so there's a minimal learning curve. Next to manual transmission vehicles in North America, Teslas have to be about the worst choice for that.

Yeah but the Tesla implementations of these features still suck. "You get used to it" is a shitty sales pitch. Basically any other car with these features has a better implementation. Tesla does it different but not better. It isn't a matter of familiarity, these designs are just bad.

My 15 year old BMW:

Has seat memory tied to the key. I don't have to fiddle with a menu to save the setting. It just... remembers.

Has steering wheel buttons with labels. Using steering wheel buttons and three fingertip-reachable and physically distinct stalks I can run my (intermittent rain sensing!) wipers, cruise control, blinkers, headlights, radio, and phone (which can stay in my pocket!).

Has an iDrive knob that controls all non-driving-critical features but can still be safely operated when driving. This includes the navigation system but also things like car settings.

Keyless entry where I just grab the handle and pull (this is one operation, not two) and the car unlocks. This works on the front doors and the trunk. It also works to start the car. No phone interaction required. The key fob stays in my pocket. In 8 years of ownership I have changed the fob battery once. There's a physical lock cylinder in the door if my key fob or the car battery die. I can lock the car with a touch as well.

Has physical buttons for almost everything (except car settings and nav). Seats (including heaters), mirrors, windows, blinkers (including hazards), head lights, cruise control, radio (volume, tuner, track, presets), dual zone climate control, hill descent, etc.

The Tesla isn't just unfamiliar, it is worse.

Oy, I wouldn't hold up a 2008 BMW as a paragon of usability. That early iDrive system was awful. Three different ways to differently manage climate temperature? Navigation straight out of the Macbook Wheel[1]? I could go on. The auto wipers were definitely better than the Tesla though.

I do largely agree with you re the Tesla, although the steering wheel controls I could argue both sides. They're multi-function, which allows you to customize their operation and do a lot more than you can with dedicated controls.

Edit: though I guess it's 2024 now. IIRC the 2009s had slightly less bad idrive.

[1] https://www.youtube.com/watch?v=9BnLbv6QYcA

I’d hold up my 2004 as a paradigm of usability though.

No screen.

I have had nothing but good experiences with iDrive in my car. Certainly better than a touch screen. It is a 2010 LCI E90, maybe the iDrive was improved?

Yeah, I believe there was an update for 2009 models that improved the UI. We had a 2008 and it was comically bad.

They really don't suck. The Tesla UI is the best I've ever used in why car. They're unfamiliar to you.

The seat memory does remember. Not just for the physical key, but for your phone. You do nothing. If my wife gets in the car, it sets up the car for her. If I do, it sets it up for me. Neither of us touch anything, it's automatic depending on where our phones are.

The steering buttons aren't labeled for a reason! Because you can remap them. Which is awesome, because I can set them up exactly how I like them. I can put all the functionality you mentioned on the steering buttons.

It doesn't need an idrive button. It has voice. I don't look at the car to navigate. I tell it what I want. Same with other non critical functions.

It needs zero phone interactions. I walk to the car and open the door. That's it. I don't look at the phone. Don't wait. It just works. For every door and the trunk. You just never think about it.

The Tesla does all the things you listed vastly better. You just haven't learned to set them up and use them.

>It doesn't need an idrive button. It has voice.

Every car has voice, it just does not work well in the US because street and establishment names are often not real words in English, people don't know how they are pronounced and, even if they do, the car itself has different ideas about pronunciation. iDrive guarantees that you can get to the "Manet st" and not the "Monet st".

>The Tesla does all the things you listed vastly better.

Don't you need to get into menus to change the A/C air direction/temperature/pressure in a Tesla? How is it better than operating a physical dial/lever for example? Especially for the people on the rear seat? Also, the glove box latch is in the menu too, is not it?

I never have trouble telling it what street I'm going to.

And no. I never go into the menus for the AC. I do it though voice.

>I never have trouble telling it what street I'm going to.

Well, good for you, perhaps you are the person the voice models had been trained on.

>And no. I never go into the menus for the AC. I do it though voice.

What about the passengers on the rear seat? And how is it "vastly better" to change the AC direction through voice than just to pull the lever until it's blowing in the right direction?

Is this why I have to ask my Uber driver to turn the rear seat heater on? How do I even interact with the voice control as a passenger? Am I supposed to say "Hey Elon, warm my ass"?

Hey! There's plenty to be critical about. It just isn't the BS being brought up in this thread so far from people who just don't know how to use the car.

But you're spot on! The fact that people in the rear have no amenities is one of the big downsides of Tesla. And that rear seat heater? You need to pay extra to unlock it! I hope they choke on their $200

That is mostly just your opinion, not facts. I returned my car because of problems like these (and the awful build quality). Not everyone agrees with what Tesla do, and that is fine.

There are plenty of things to complain about. But the ones you mentioned are literally not problems. You just didn't know how to use the car if you needed phone interactions to open the car, or didn't have seat memory working, or didn't set up your steering buttons. That's not a matter of opinion, those are facts.

Give BMW i4 a drive. It's excellent.

I absolutely will, thanks for the recommendation!

BMW is well known for their poor longevity with electrical systems. I wonder how this will play out in their EV lines, or if because they've removed the ICE related electronics and things such as engine bay heat if matters will improve.

Actually in the EV world BMW is known for the longevity of its batteries. BMW had EVs in the market already in 2013-2014, the BMW i3. And the reported degradation of those batteries has been minimal.

BMW is currently having all excellent EV cars, and that’s even with shared architecture with their ICE counterparts. Specially their electrical motors are above everyone else’s, due to the lack of permanent magnets, which allows for finer control of their power and instant disconnection. I am expecting to BMW to beat Tesla completely when they finally offer their dedicated EV platform in 2025-2026.

> BMW is currently having all excellent EV cars

Maybe excellent, but they have nothing as affordable as what other EV makers are offering AFAICT.

Not everyone wants Lamborghini acceleration. I find that riding in a Tesla makes me ill because of how fast it's always lurching forward.

Okay, you're welcome to buy a golf cart or something. You're also welcome to drive a Tesla and turn the driving mode to "chill" or "comfort". In a Polestar you don't have a choice -- their "sport" mode just turns off traction control. An electric car being incapable of responsive driving is objectively bad.

The Polestar 2's 0-60 time is 3.7 seconds. That is faster than a Ferrari F430.

This tracks, seems people like Tesla for the zoom zoom factor. In my experience everything else about Tesla is F-tier.

Personally I care more about an elegant ride than a fast, jerky one.

I’m confused, you were driving a rented car on a racetrack?

Rented a Polestar from Hertz last year. It died in the driveway at 80% battery and wouldn't come on. Hertz had to have it towed 350km to the nearest Polestar service centre. Hertz refused to deliver a replacement car and just refunded the rental. Did not make me love Hertz or Polestar

* ... low price. Prices can't be cheap. Pet peeve, sorry.

I had a mostly great experience with Hertz Polestar in Switzerland. Easy to drive, did well on the road.

The most painful part of the experience was attempting to charge it before returning it. Finding a compatible, working L3 charger was very difficult, even in Zurich and the experience of downloading an app to start the charging process was terrible. It of course, didn't accept my non-Swiss credit card and I had a get a local friend to help with the payment part.

> It of course, didn't accept my non-Swiss credit card

If I can't use the vehicle without needing to carry a working cellular-connected computer running a specific operating system in my pocket and/or having a specific category of bank card, that's a hard 'no' for me. Either have the car negotiate payment with the charging network or give me the option of handing currency to a person at a register. Otherwise I insist on a dino car.

Charging Teslas with Tesla Superchargers is as streamlined as possible: just plug in. Charging non-Teslas at SCs is almost as good, you just need to tell the app which unit you're plugged into.

It's third-party chargers that are an endless source of frustration.

> Charging non-Teslas at SCs is almost as good, you just need to tell the app which unit you're plugged into.

That's not the "just need to" that works for me. For privacy reasons I don't carry a device that constantly reports my personal information to Apple or Google. Can I install this app from F-Droid? Strike one.

Now supposing I decide I'm cool with being tracked by Apple or Google all the time and use a device I can get the app on. Do I need to register an account with the app? With my personal information? So the fact that I am driving a specific Tesla vehicle along with my location can be tracked by Tesla? Strike two.

Now supposing I decide I'm cool with being tracked by Apple or Google and Tesla, do I need to register a Visa or Mastercard with the app so I can also be tracked by the payment provider, who will sell my transactions to random third-party eReceipt brokers who will dutifully add my travel habits to the profile they keep on me? Strike three.

Nope. Not playing any of these games. Gas car, cash. Thank you very much.

Eh, you could just have used a Tesla Supercharger

Polestar 2s can't be charged at a supercharger, can they? At least they can't in the US.

Pretty much every EU EV uses CCS2, and certain Tesla Superchargers allow 3rd party access, there's about 50 in Italy according to their app

They can for most of them in the EU. In Switzerland it's also the only vaguely non-ridiculously expensive option.

my Polestar experience was great, except for the fact that for a car that has the dimensions of an SUV, the tiny windscreen and windows made it feel a bit claustrophobic, like being in a sports sedan

Lots and lots of Bolts on there if you take a look

I thought Bloomberg was better than cheap sensationalism.

They still haven't retracted the Supermicro story based on a fictional hypothetical scenario twisted into a lie.

They're not purchasing Polestars in order to replace those Teslas, either.

Bloomberg has the same story and cites high repair costs as one of the reasons, so you may be onto something.

That coupled with customer complaints and annoyance could definitely sour the company on it.

Adrian Cockcroft wrote about his Hertz experiences back in April.

Update: Bad experiences renting electric cars from Hertz https://adrianco.medium.com/experiences-renting-electric-car...

Seems like a lot of random complaints, from mobile apps to lane-keeping software. Not much seems specific to EVs, more just about new technologies.

I guess you can rent a $20k Kia and avoid all the new tech.

If a brand popped up and offered a gasoline ICE with old toyota-level reliability and longevity, and without electronics (save for maybe bluetooth for some music) I'd pay a sizeable premium for it.

I'd like to think I would. I hope new buyers would.I would stick with used toyotas. I suspect the manufacturers know this and build accordingly.

Problem for Hertz is that everyone wants a Toyota. Why sell a fleet at fleet pricing when you have 100k in the retail waitlist queue.

I'm with you on that. I don't need a screen full of soon-to-be outdated software on it. I carry one with me everywhere and it works just fine.

CarPlay is all I need. I use the car screen for navigation and that's about it.

I'd be fine ditching bluetooth. I'd be fine with an AUX cable. Most people have their phone on some charging mount anyways, so there's already a cable running to the location so wireless isn't much of an advantage here

Yep I can confirm this works quite well since it's what I used for over a decade until I got a new car a couple years ago. Bluetooth can be annoyingly flaky in many cars but plugging in a cable literally just works. My old sound system and traditional controls worked great and I have considered replacing the more modern system that came with my current car with something more like the old one.

My pet peeve about BT in cars is that it can interrupt phone calls when your spouse starts the car or arrives home. I guess it's nice that cars have good BT range, but it would be nice if it could sense whether the phone is in the car, or perhaps 30 feet away, in my bedroom (and I'm on a call!).

For now, I stick to wired USB...

so far I'm really happy with my 21 tacoma... it's got just enough tech but lots of physical buttons. I just use android auto with a wireless dongle. the only issue with that is it takes about 12-20 seconds to pair on car start. The stereo is just a 2 din box as well with minimal car interactions, just a forward back/up down volume button on the wheel. which reminds me the volume is left right not up down, which is crazy.

it's a very nice mix so far of just truck and modern.

> brand popped up and offered a gasoline ICE with old toyota-level reliability and longevity, and without electronics

Bought that car last year for about 20K - Kia Rio 5 door. Wonderful little car.

Oh yeah? I will definitely look it up. Thanks for the info.

Kia has really turned things around, definitely worth a look.

No complaints on the Kia Carnival I got.

I was looking at used compact cars but the market was insane. Even with a COVID markup on the new Rio, the price was competitive with used Corollas/Civics that were 10 years old and had 75K+ miles. This is my 6th or 7th Hyundai/Kia and they've all been fantastic.

Edit: I forgot but I have some bad news, Kia is probably killing the Rio so you might be out of luck. Makes sense as the dealerships heavily promote the Forte and barely stock any Rios. The salespeople were a little surprised we loved the Rio so much, I think it's just too small for most Americans.

Yeah, looks like '23 was the last year. I'm also reading that it's a bit underpowered. I like small calls, but I don't like struggling to get a up hill. Though, I have driven a few Hyundai-labeled hatchbacks (can't remember the name) from around '15, and they were quite good. I don't know much about their operation. Is Kia the same underlying tech?

> Kia Rio 5 door

You missed a very important bit: 'old toyota-level reliability and longevity' ;)

Was customer complaints cited as one of the reasons?

Hertz doesn't care about customer complaints, other than as a KPI that they A) still have customers and B) aren't "wasting" money on such luxury things as making sure the customer's rental is actually available when they contracted for it.

Please do not look for excuses to post irrelevant rants.

Is there a reason why body damage on an EV would cost more to repair?

Yes, because the Model 3 incorporates quite a bit of aluminum in the body. This is good for weight savings, but more difficult to work with.

The root cause is that batteries are too heavy so other components must be made lighter.

The Model S has a fair amount of aluminum in the body (about 400 pounds or so, IIRC). The Model 3 is much more biased towards steel for most of the body, due to cost.

Do you know why it's harder to work with? My untrained brain would have assumed it was easier, what with it being more malleable.

Aluminum is more brittle and far more difficult to weld than steel.

But we're comparing to fiberglass, not steel.

Possibly due to Work Hardening.

https://en.wikipedia.org/wiki/Work_hardening

To an extent, for banging into shapes, but it's challenging to add more material to it if needed. None of the options are especially good compared to welding, though that's just my opinion (compared to fasteners - size, brazing - high temperature but maybe).

Other materials have their own issues, but if you cast large pieces of anything you also make it super expensive to replace parts that can't be repaired onsite.

A lot of guys are telling you it's because it the workability of aluminium which is purified bullshit. Panelbeaters rarely work panels nowadays, they replace them. The problem with Tesla is that they're gaping assholes when it comes to supplying parts to third party repairers. Repairing Teslas is expensive because that's how Tesla wants it to be.

I suspect the main reason is because Tesla has a monopoly on replacement body parts.

Plus, they’ve spent years prioritizing production and sales, not service. As a result their cars aren’t designed with repairability in mind and their service centers are backlogged, and even when they can work on your car they may not get parts, because they go to new cars.

Body damage far from the battery for me was normal price. Anything close to the battery was outrageously expensive for me.

Tesla uses Giga Presses to build the body of some of their models. While lighter and stronger than a body build of smaller parts, it also makes impossible to repair damages by replacing some of the smaller parts.

Don't know if the Tesla cars owned by Hertz are built using a Giga Press.

Getting replacement parts from Tesla has been consistently reported as time consuming. Even if the repair is the same cost, there's more loss of use if you can't get parts in a timely fashion.

It’s got nothing to do with being an EV and everything to do with Tesla requiring monopolized first party repairs where they dictate prices and refuse to sell parts to third party shops.

Someone told me if butterfly door gets jammed (and it would in rainy weather), it costs $20 to fix just one door! This person has sweared that he will never ever buy another Tesla again. l How did Tesla didn’t got this right?

but don't they charge body repairs back to customers with juicy markups? i thought that was a core part of the car rental business model

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