Rental firm Hertz Global Holdings (HTZ.O) said on Thursday it would sell about 20,000 electric vehicles, including Teslas, from its U.S. fleet due to higher expenses related to collision and damage, and will opt for gas-powered vehicles.
Shares of the company, which also operates vehicles from Swedish EV maker Polestar among others, fell about 4%. Tesla’s (TSLA.O) stock was down about 3%.
Hertz also expects to book an about $245 million charge related to depreciation expenses from the proposed EV sale in the fourth quarter of 2023.
Hertz’s decision underscores the bumpy road EVs have hit as the growth rate on sales of those vehicles has slowed, causing carmakers like General Motors (GM.N) and Ford (F.N) to scale back production plans of those vehicles.
Morgan Stanley analyst Adam Jonas in a note said the car rental firm’s move was a warning across the EV space and it was another sign that EV expectations need to be “reset downward across the market.”
“While consumers enjoy the driving experience and fuel savings (per mile) of an EV, there are other ‘hidden’ costs to EV ownership,” Jonas added.
Nothing in that statement indicates EVs are crashing more frequently. What they’re saying is that all their rental vehicles are susceptible to crashing but these ones cost a lot more to fix compared to the rest.
Again, why would EV be more expensive to fix after a crash? EV Berlingo uses the same components as ICE Berlingo so as long as the crash doesn’t damage the battery cost will be the same. And if battery is damaged the car is probably totalled anyway. So again, is it simply because fixing Teslas is more expensive?
P.S. more frequent crashes could still be the reason and since we recently saw reports about Tesla drivers causing more crashes it probable is.
Perhaps the battery is damaged? In some EV it runs the full length of the car. Side impact in ICE dents door and side frame but engine is fine. Getting hit basically anywhere has potential to damage battery.
Also probably is just more expensive to repair and requires specalized/qualified repair places. Kinda like Iphones with lack of Right to Repair protection.
This would makes sense so we have two options:
Teslas crash more often (which they actually do: https://cleantechnica.com/2023/12/20/tesla-drivers-get-into-the-most-crashes-but-why/)
Batteries in EVs are easily demanded. I found this:
The benefit of these structural battery packs is mostly in the assembly — using the battery as a part of the architecture makes it quicker (and therefore cheaper) to construct the entire car. (https://jalopnik.com/ev-battery-damage-minor-crash-car-totaled-recycling-1850243294)
So Tesla definitely has this problem. I can’t find info about other brands but my guess is that for example my Berlingo doesn’t use structural battery since it has the same design as ICE version. It really looks like Teslas as just terrible cars for car rental but not necessarily indicate ‘hidden’ costs for EVs in general.
They’re not repairing whatever a Berlingo is. They’re repairing Teslas and Polestars. This is like saying my Camry is cheap to fix, so an SL500 Mercedes should also be cheap to fix.
Also that report about Tesla drivers having the most accidents was complete garbage based on junk data (car insurance applications using the driver’s complete record but only the current vehicle they wanted to insure). Even the company he worked for included a large heading at the top of the page indicating that the statements were simply the opinion of the author.
The thing I find interesting is that these vehicles should be covered by insurance that would cover repairs after deductible.
I don’t understand why there would be any difference between EV and ICE in that regard.
Companies this size might self insure and do their own repairs. If parts cost 5x as much, the repair is going to cost more. Same as with a Toyota versus an Audi.
Yeah… I was thinking that self insuring would be the only possible way this could make sense really.
It just never occurred to me before that car rental companies might do that.