Hertz orders 100k Teslas
bloomberg.com
bloomberg.com
A wedding that was 1 hour from an airport, ~100 miles RT.
A ski trip where I wanted to drive from Denver to my AirBnB near Winter Park Colorado, ~200 miles RT.
A hiking trip where I needed a second car for a point-to-point car shuttle (New Hampshire!), ~120 miles RT.
A bachelor party where I needed to drive from the airport to a trailhead then to an AirBnB then back to airport, ~150 miles RT.
A national park trip to the Grand Canyon, ~500 miles RT.
Each of those scenarios would have been 1 full charge of a Tesla round-trip, with the exception of the Grand Canyon. Maybe not the ski trip since it's mountainous and cold weather kills the battery so 200 miles might be a stretch, but I could have trickle-charged at my AirBnB. So basically I can see how many quick rental car needs are met by EVs, plus no dealing with filling with gas!
Wonder how the pricing and will be affected by the juice left in when you return it. And how their scheduling manages it.
Also, will “FSD” be enabled or disabled? There’s an interesting liability chain.
The last three times I've rented a car it's been turned and burned and I've had to wait a few minutes for a clean/wash to be complete from the last renter.
That seems, well, stupid. Frankly, I'm not sure if most customers ever even see me in my rental car.
Sad but true in many parts of the world
People judge each other on what car they drive, regardless of how they got their hands on it.
There are two issues at hand: accident liability and damage/theft.
For liability, it’s typical that states require rental companies to purchase stare minimum or sometimes a higher liability level than the state minimum as a base.
For damage/collision, there’s no requirement for anyone to hold coverage, so that’s on you. Many travel credit cards offer damage/collision insurance as a feature, and some individual car insurance plans extend coverage from your personal car insurance to rented cars, but don’t assume this.
You can generally rent a car if you don’t own a car and don’t own your own car insurance, and in most states you wouldn’t be obligated to purchase additional coverage from the car insurer.
A Tesla is no different than any other expensive car rental, the fact that it’s electric is irrelevant. It’s no different than renting an Audi Q7 from a rental car company.
I'll even pay a premium for a 100% guaranteed reserved charging spot at a hotel. This way I can just gun it and arrive at 1% charge, plug in, sleep, have breakfast and be on my way with a full battery again.
We had gov't grants available to build charging stations, and couldn't get them because of the power grid situation.
Kind of like how the dealer networks, which SHOULD be a massive advantage for Ford/GM to place chargers (and shadow market cars) and build out a huge charging network... well, that's not happening because dealers hate EVs.
But I now believe that they indeed are doing it and that we’re finally at the EV revolution.
I’m not an early adopter type and the Teslas don’t excite me at all, but I’m really delighted that the market is evolving. I’m delighted that I was wrong.
They are probably a few other things, but this is the mystery of their valuation.
[1] https://www.tesmanian.com/blogs/tesmanian-blog/teslas-market...
But my theory with petroleum is that it has so many HUGE economies of scale built into its production that a demand collapse will send it into a rapid tailspin.
A small version of this happened in the Dakotas when the Saudis started dumping oil to get it under a price, and the North Dakota oil industry collapsed. That was due to intentional oversupply, not necessarily due to collapsed demand.
But so much of the oil market is now pretty expensive extraction: tar sands, shale oil, fracking, deep offshore. The easy stuff is gone. That to me means that the industry rests on a certain price, and if it falls under that, the industry can't sustain it.
I think the big thing in this reverse economies of scale, where costs rise as the industry shrinks (and absorbs writeoffs) is that finance, already somewhat intimidated by the growing pressure to divest from fossil fuels, will rapidly abandon it once it becomes extremely risky due to collapsing demand and massive migrations of transportation modes to electric.
It's all vague decade-away prognostication, but you'll start hearing the violins playing for oil companies when some combination of this happens:
- charging infrastructure builds out (2 years to catch the current Tesla supercharger, probably another 5 years to get some semblance of every-50-miles availability)
- LFP chemistry hits a power density of somewhere around 200-250wh/kg (LFP is really cheap and has far less materials restrictions from cobalt) (probably in 1-2 years for mass production)
- various solid state technologies hit production (looks unlikely for 5 years)
- EV drivetrain cost (battery, motors, cooling, case, management systems, etc) drops to 2/3 of ICE (probably another 4 years)
- a carbon tax, a more substantial EV subsidy
The floor will rapidly fall.
I'm not saying Tesla isn't insanely valued. But the grim reaper is coming for all those oil companies.
Do you want to buy stocks in companies that have a strong future of growth, or who have always made a lot of money doing one thing, and expect to keep making money doing that same old thing, even though it's clearly not going to last.
While they're not going to die overnight, I suspect they're not going to be worth all that much by 2050, and ~nothing by 2075.
Goodwill is on the asset side of the equation.
Basically, Tesla stock owners consider the company to have ambiguous secret sauce of the right employees, IP, brand recognition/reputation that makes it more valuable than its current on-paper business activity.
Or, it’s just a stock that they believe they can find buyers for – a belief which has been proven to so far be true.
It's not a problem for Tesla or Elon per-se, but we shouldn't assign intelligence to people basically voting for their favs with their wallets.
(Myself, if I had some funds that are not already earmarked for something more important, I'd dump some into TSLA just as an expression of support to Musk and electrification of transport. I'm sure many people did just that, with no expectations of return.)
Tesla doesn't have nearly the size of the distribution network of any of the oil companies.
The fact is Tesla was trading at 1000x historic earnings, and 161x future earnings, or to put it another way, 10x any other car manufacturer, and this this was before this deal. [0]
This simply doesn't make any sense.
[0] https://www.tradestation.com/insights/2021/04/08/tesla-overv...
The other OEMs are laden with debt, which Tesla doesn't have so any comparison there would be at the EV level which doesn't make Tesla look that out of line considering it is about to overtake in 3-4 years most of the companies it is compared with. Also that debt the other OEMs have, was used to build ICE factories and technologies which are quickly becoming outdated.
If and its a rather big IF I'll grant you that Tesla manages to achieve what they aim for which is 20 million cars in 2030, thats effectively 1/5 market share globally. Add into that the energy storage, charging network, solar roof tiles, AI and FSD.
However any signs of growth weakness or interest rate changes will wreak havoc for sure.
Even if Tesla falters, the other LICE OEMs are destined to fail, maybe 1-2 survives (GM/VW), the cat is out of the bag and what looked like a totally entrenched industry has been blown wide open by Tesla, and loads of other startups are following through.
While these may be hits or misses, they underline the immense market penetration of Tesla. They're not just cars, which is why many investors project a much higher valuation for them in the coming years.
There is still a disconnect for me. First everyone outsources, apparently successfully for automotive, and that’s great, all these joint ventures between car makers etc. Then Tesl comes along, integrates everything, and poof that’s also good..?
Tesla started much later and didn't have this problem.
Tesla's stock price is confusing because it cannot be explained, let alone justified, by any market analysis, results, or market price calculation. It's purely willingness to pay driven by meme stock speculation.
> They are also a car manufacturing supply chain, having brought much of their component production in house.
This assertion makes absolutely no sense given that Tesla's market value is currently greater than Volkswagen's market value, and by no means is Tesla even comparable with Volkswagen in terms of any of the criteria you've brought up.
So basically a car company. GM makes their cars in-house. They own their own parts supplier (acdelco) and charging/distribution network (Ultium Charge 360). Ford and Stellantis are working on the same.
"Tesla the stock isn't being valued by any metrics that make sense and today investors are paying too much for their future growth which is dangerous."
I know you can't compare valuation and production of a company, but still. If Tesla were making 10,000 dollar profit per car - and they don't - they would have to produce 100 million cars just to make a trillion. They produce less than 1 million per year. I know they also sell batteries etc. but it's still mainly a car company.
Their yearly profits might be a few billion. So their value is more than 100 times their yearly profits. This is insane for a manufacturing company. Currently their P/E ratio stands at more than 330. VW, a very well run auto manufacturer has a P/E ratio of less than 6, Ford 17, Mercedes-Benz 7, BMW 5, Hyundai 15.
These are all companies with electric cars on the road and a future that is totally committed to electric vehicles. These are all companies that already have production facilities, etc.
I like Tesla and their business model. I just think the stock is hyped way beyond what is sustainable.
I think part of what's driving the increase in Tesla's value is the realization that this thesis was wrong.
Tesla is now beating all the established manufacturers at gross automotive margins, and it's really not close. Toyota is around 18%, Ford and GM around 15%. Tesla is up at 27%.
Part of that might be demand-driven higher prices. But Tesla continues to reduce their cost of goods, and Tesla has emerged as the most innovative manufacturer, which we already see in teardowns of the Model Y, with huge sections cast as one piece, but particularly in the design of Cybertruck, and Gigafactory.
Tesla is far out in the lead on software. They appear to be rapidly improving on manufacturing. Tesla has paid down its debt with stock issuances, the company has $16 billion cash on hand, and the ability to go get a lot more nearly for free.
If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?
But once the floor falls off? They won't go gentle into that good night. I expect a wave of bailouts, consolidation and rapid retooling (and playing every dirty trick in the MBA book there is). I wouldn't discount the possibility that some of the survivors will have enough infrastructure and engineering competence remaining to quickly become a serious competitor for Tesla. In parallel, Tesla itself may fall prey to one of many ways companies decay over time. And then, of course, there's China.
But all in all, as long as Tesla's current performance pushes EVs over the threshold of market acceptability (which I believe it did a few years ago) and gives it some serious momentum, it's "mission fucking accomplished", regardless of who's the market leader in 10 or 20 years.
Brand loyalty or aspiration that predates EVs; cheaper entry price (already happening); build quality; better UI (the giant touchscreen is a negative for a lot of people).
There are lots of reasons to buy a non-Tesla EV. I know people who, being told that the Mach-E wasn't going to be available for a while bought another ICE to drive until it was ready. I know people who bought Hyundais instead of Teslas. Heck, one person even opted for a plugin hybrid because only the Tesla had the range he needed for work and he didn't want one.
A good chunk of people I know are already opting for not-Tesla EVs. It's a brand that seems popular with a subset of the population, but doesn't have the widespread love that people on HN seem to assume.
I also think it's weird that people are comparing margins on ICE vs EV cars. Obviously, those will different. You want to focus on their margins in the EV space.
So clearly the major manufacturers are not going to beat them on sheer volume either.
OTOH everybody is in a bit of an uncharted territory with the EVs and SW heavy cars. VW's new Golf has been riddled with SW bugs, and their EV line has not avoided it as well. But the body panels, interior materials... And Tesla (Musk) has said they need to improve the build quality and lower warranty claims.
So like I said- would be interesting to revisit these numbers, maybe not now, but in a year...
That said, I don't understand their stock price either, even in the light of all that, so I don't own any of their stock.
But my next car will be a Cybertruck. Once you go electric there's really no going back. And that's how it ought to be in general: green options _must_ be better all around (perhaps with the exception of price, though I'm sure price differential will go down over time), not a fucking "tofurky" style garbage that no one would buy if it wasn't "green". Because you can make people tolerate things "for the greater good", but you can't make them like things that suck, at least not for long.
Can you explain what on earth that means? Apple makes good use of their device ecosystem, purchased app lockin and network effects to maintain an excellent position. Tesla has none of those benefits, other than their US (not EU etc. which is required to be open) supercharger network (which they promised to open to all EVs).
When I read your post (e.g. it's obvious as soon as you drive one, once you go electric you never go back) and both of those sound like arguments for EVs, not Tesla. Tesla may have made those two synonymous for a while, but I cannot believe it will last.
I will ask, are their departures from traditional manufacturing good? Even people I know with a Tesla that mostly has sat in a garage for its life (no need to commute during WFH because of COVID) say it's already showing extreme wear.
Retail investors, and particularly first time investors, in the market have been growing rapidly. These kinds of investors tend to be less careful with where they invest, relying primarily on the media, word of mouth and hype than on fundamentals. With enough people you have a critical mass, creating a chain reaction that's impossible to stop. This is literally free investment for a company. As a serious investor, you would be foolish to ignore this. Even if the company was not positioned to do well earlier, this new found cash flow gives them a huge edge. And thus this creates a sort of a self fulfilling prophecy where more and more people invest, because they believe everyone else is investing, and because everyone else is investing the company will surely become #1 irrespective of where they are today, and inadvertently propelling the company to become #1 in the process.
It seems like Tesla's success combination of a genuinely good product, the Musk hype (and troll) machine, early mover advantage, and most importantly access to cheap capital to build vertically integrated manufacturing and distribution operations that are unheard of in this industry.
Tesla's playbook is also unusual and contrarian to traditional wisdom on a number of things - unlike most tech companies, they outsource very little of their core manufacturing, making it an extremely capital intensive operation; they rely on their CEO trolling on Twitter for building hype for their products; they make promises which they almost always underdeliver and frustrate early adopters with quality issues; they make unsubstantiated claims about their self driving tech and yet are still making progress that skeptics are ignoring.
This is what keeps short sellers, stock analysts, economists and B-school profs on their toes when it comes to their predictions on Tesla. Reminds me of the early days of the iPhone era where a lot of folks were convinced it is going to fail.
Tesla as a company has basically retired all debt, they have 16 billion in cash and no debt. Their position is far better then other car companies.
> I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though.
Even if the Tesla stock dropped by 90%, Tesla would be perfectly fine. They do not really on raising money anymore. They create large amounts of free cashflow and enough profit to finance considerable future investment.
If there genuinely is going to be a revolution, then Tesla can't own it all.
We don't know if this was a decision after thorough analysis or just a quick money grab.
This applies to something like half the population right now (in the US). And we're on the path to alleviate issues for the other half of the population in the next few to several years.
The other major issue (which is probably the bigger one) is that car manufacturers other than Tesla can't seem to actually get out enough cars to do anything other than supply California and maybe NY. Teslas are expensive and have a litany of quality issues that push "regulars" away from them. Once Hyundai has an electric that has inventory nationwide at a reasonable price, then we have a revolutionary orderly transition on our hands.
https://www.drive.com.au/news/norway-to-hit-100-per-cent-ele...
I'd call that a revolution on a small country scale.
Of coarse there are other brands of smartphones, but not thing comes close to iPhone in terms of the brand, just like Tesla. There will always be metrics other brands can beat Tesla in, but the overall brand and product is unrivaled and will probably be so for the next 10 years. After that though, it's anyone's guess.
Most people cannot afford to drop 50k on a tesla.
Or "like the car you hire, pay X and keep it". There would have to be margin in that as rental companies usually sell cars to dealers quite early in their life and dealers are only going to pay bottom dollar.
https://www.caranddriver.com/news/a38052601/hertz-buying-100...
That should translate into savings and/or warm fuzzies for customers in the long-run, though it may take a minute before we get there.
There was no realistic scenario for rental companies to start competing on this axis with ICEs, petrol is an inherently hazardous chemicals royal PITA.
No wonder they’re beating everyone else at this game. These guys rule!
A car is a tool I use to get my family around from point A to B SAFELY. Its also a fairly significant chunk of debt, and I want it to last a long time and behave EXACTLY the way I expect it to. Every day.
Tesla really doesn't fit that bill atm
Once you know those truths, Tesla isn’t a bad choice as their computers are at least partially upgradeable and the interface changes have been decent from my perspective (although this is hugely subjective).
(I have no Tesla investments or products.)
The reasons Hertz is considered to be getting a great deal here by investors is that EVs retain their value a lot better and are known to have much lower maintenance overhead. So, they'll get more miles out of them before they have to sell them on, get back more when they do, and be able to charge a premium for them at the same time. In a market where margins are razor thin, that's a big deal.
It's more a question of when than if their competitors will be lining up to buy some EVs. They'll have to. And then of course the next question is which one they'd be buying. The answer for the next few years is that Tesla is one of the few companies that has both product and manufacturing ready for volume production. Of course a few other manufacturers might make some nice money here too.
So, investors are thinking that Tesla could end up supplying many hundreds of thousands of vehicles for rental per year in the next few years. On top of their other business, which is also continuing to grow at a very nice pace. They'll likely need a few new factories for this but they've shown they can deliver those as well.
https://caredge.com/tesla/model-3/maintenance#schedule - Hertz could easily train 1 tech at every airport to do this entire maintenance with a basic lift and simple materials.
For a Toyota Camry, this work occurs 2x as often (downtime is a big deal for rental companies) and is not easily performed without a much more capable shop: https://caredge.com/toyota/camry/maintenance#schedule
Less moving parts, less fluids…now I want a Model 3.
Not too long ago Elon talked about Tesla making up to 20 million cars per year in 2030. That would make Tesla twice as large as VW, the currently largest car manufacturer. Of course this statement was treated as Elons typical optimism, but deals like this pave the way to that actually coming true.
In 2012 Elon predicted 500k vehicles in 2020 and he was spot on. So lets see the 2020 prediction for 2030.
I feel people have really short memory wrt. Elon's optimism. Not everything he promises pans out (autopilot being the prime example), but usually, it does, just slightly later than promised.
Renault Clio on spot #2 with 18k sold.
Interesting considering the price of the tesla….
It leads to a misleading number if not averaged over the other months.
> Normally, Tesla would deliver only a handful of cars during the first 2 months of a quarter and then deliver an incredible amount of cars during the last month a quarter.
https://electrek.co/2018/06/07/tesla-sales-norway-surge-stab...
If nothing goes wrong, the first two-three years are practically free for an EV. Home charging costs pennies and if you're really stingy you can use free public chargers.
Then you might need a new set of tires maybe a quick maintenance at the dealership and you're good for a few years again.
Unless you also have solar panels at home and want to have the hassles of making sure your EV only charges on sunny days, you're going to be paying rates for electricity close to rates for dinosaur-fuel, especially if you're comparing to a modern 60 mpg gas car.
Makes little sense for Tesla to sell at low margin when they are supply constrained.
I'd be interested to hear from a Tesla owner on this. Maybe it's a non-issue.
>I'd be interested to hear from a Tesla owner on this
Not a Tesla owner, but I did take one for a 30 minute test drive. There wasn't really any learning curve except for that when you let your foot off the accelerator (gas?) pedal, the regenerative braking kicks in, and you start slowing down very quickly. I didn't touch the brake pedal for the whole drive. Got used to it in a few minutes.
The hardest thing for me was the cruise control. Only a subset of autopilot features were enabled and I found it a bit difficult to operate.
Me too. I actually looked into that a few months ago. In Boston Massachusetts, there is this place: https://www.teslarents.com/
But we were going to San Francisco not Boston, and there was nothing that I could google up. With the exception of Oslo, Norway; I've never seen so many Teslas as I did in the Bay area, but it seemed really hard to rent one for a few days.
Maybe by the next time that I'm there a Tesla 3 will be standard at Hertz, but in 2021 you'll be lucky to get a Nissan. The competence and availability of even that, was low.
With these the big issue would be charging them - people might not know not to go to a gas station.
Also wonder how the “full tank” policy will work with EVs where ideally you want to hover around 80%
Where they might not be suitable rental cars is the reliability. There are some horror stories where people wait 6+ months for their cars to be fixed, based on parts availability, but Hertz probably has some service requirements built in the contract.
I thought for electric cars, that's already baked in? in other words, the car displays 100% and stops charging, but the battery is actually 80% charged. Also, I think for electric cars, they'll waive the "full tank" requirement or charge you a reasonable amount to make up the difference (cost of electricity plus a small markup). I sure as hell don't want to spend 30 minutes at a charging station the morning of my flight.
TESLA
These Electric Vehicle Rental Terms (“Rental Terms”) are between The Hertz Corporation (“Hertz” or “us”) and You and apply to a rental of an electric vehicle (“EV”) from Hertz. An EV is defined as a vehicle that exclusively uses battery power rather than gasoline or diesel fuel. These Electric Vehicle Rental Terms are in addition to the Terms and Conditions of the Rental Agreement applicable to your rental.
CHARGE LEVEL AT PICK-UP AND RETURN– Hertz will endeavor to provide the EV at time of vehicle pick-up with a battery charge of 80%. You are required to return the EV with a minimum charge of 10%. You are responsible to maintain a sufficient charge on the EV during your rental. You will be responsible for the cost of any tow if the EV is not drivable due to a low battery. You are not authorized to call a private tow on Hertz’ behalf. All tows of the EV must be by flatbed and must be arranged through Hertz Emergency Roadside Assistance.
RANGE – Range is the estimated distance an EV can travel on a single charge. The EV information provided with your reservation that describes a range is not guaranteed. The battery life of the EV is impacted by a number of factors including weather, driving and road conditions. It is your responsibility to ensure the EV has sufficient remaining battery life to return the EV to Hertz or reach an EV charging station.
CHARGING DURING RENTAL – Subject to Tesla’s terms and conditions, Tesla EV’s are able to access Tesla Superchargers to recharge the EV. If You use a Tesla Supercharger to recharge the EV during your rental, that cost will be billed back to Hertz and added to your rental charges. These charges may not appear on the final invoice and may be added later due to processing time. Battery charging limit on a Tesla should be set at 90% maximum. You may recharge the EV at other public or private charging locations at your own cost. You may also have to register and incur a fee at certain of these locations. You are responsible for any registration (including accepting terms and conditions and privacy policy) and any fees. If You do not move the EV promptly from the charging stall when it is finished charging You may incur an Idle fee for the time the EV remains in a charging stall after it is finished charging. You are responsible for and will indemnify Hertz for any Idle or similar fee incurred when the EV is on rent to You.
DAMAGE TO CHARGING STATIONS – You are responsible for any damage to the EV, the charging station equipment or the charging location when charging the EV during your rental. You will indemnify Hertz for any charges, fines, or penalties You incur for any damage or loss to the EV, the charging station or location during your rental.
EQUIPMENT – The EV will be provided to You with certain equipment for which You are responsible. You are responsible to notify Hertz if any of the following equipment is not with the EV at the time of pick up. Otherwise, You will be charged for any missing equipment at return. Loss Damage Waiver (LDW) does not apply to damage or loss of the equipment provided with the EV.
Key card or fob – You are responsible to return the Key card or Key fob upon your rental return. If the Key card or fob is damaged or lost, You will be charged to replace the Key Card or fob and a service fee. The Key card or Key fob must only be used to charge the EV You have rented. Sharing the Key card or Key fob, using additional Key cards or Key fobs to charge the EV, or charging other vehicles is prohibited. Any misuse of the Key card or Key fob in breach of these Rental Terms will result in additional usage charges.
Tesla Charging Kit – The Tesla Charging Kit consists of 1 Mobile Connector; 1 Storage Bag; and 1 NEMA 5-15 Adapter. You are responsible to return all contents of the Charging Kit upon your rental return. If the Charging Kit, or any part of the contents are damaged or lost, You will be charged for a complete Charging Kit, as these items are not available to be replaced individually, and a service fee.
J1772 Adapter – You are responsible to return the J1772 Adapter on your rental return. If this Adapter is damaged or lost, You will be charged to replace the Adapter and a service fee.
DASH CAM AND PERSONAL DATA – The EV may be equipped with a Dash Cam which may record incidents involving the EV during your rental and privacy is not guaranteed. You are responsible at return to delete all personal data input by You or collected by the EV during your rental.
The driving with regen is if anything similar to a dodgem car.
I have a model 3 but I forget this crap all the time. They'll need to provide decent documentation beyond the touch screen (and I'm sure they will).
Imagine you've been playing on a 60hz refresh rate monitor forever. Then, you play your favorite fps on a 120hz refresh rate monitor.
That's what the difference feels like.
Gas automatic cars :)
Having to do a full reset of the head unit after every customer isn't really a good option.
And I'm pretty sure they'll tap in to the car telemetry and they WILL know if you've been doing quarter mile runs on their car =)
Tesla's navigation software will show charging locations, as well as add stops automatically if you're planning a route that's too far for the current state of charge.
Plugshare is a good site for finding chargers of all types.
I also suspect they will have lower backend operating costs and potentially cost drivers less on additional insurance since they can operate in FSD and put the liability on Tesla.
Their lots really aren't "always full of cars". A lot of rental companies, especially franchises, have sold a lot of their cars due to reduced demand and insane used car prices.
And perhaps if you're a customer picking out Model 3 cars on the lot and you pick one not fully charged.. you could decide to wait it out or just drive.
If you don't require your customers to return a full vehicle, they don't need to deliver them full to the customer either. I experienced this in Croatia when I discovered they are actually not allowed to require the car be returned full (some local legislation apparently). So they delivered it about 3/5th full and I returned it back in the same state. They just eyeballed it and it was fine. Actually annoying like this because I had to remember when to fill it up (and by how much) in order to return it with that quantity. In the end I put about 10 liters in it when it was about 2/5th and then drove another 20km.
They'll probably do a quick top up using their own chargers while they are cleaning the car. No need for them to charge to anywhere close to 100%. It's actually bad for the battery to do that regularly. So, it's also not something they'd want their customers to do. Anything over 10% is fine and can be topped up in 20 minutes or so to about 70-80% if you have the right charging infrastructure. But probably lower once they start cutting cost a bit. I wouldn't be surprised to get a Tesla rental with 40-50% charge only. Plenty of range on that and I can fix it at the next super charger in 20 minutes. For free because its included in the rental price (also announced). They just eliminated fuel as a variable cost for the driver. They'll probably charge per mile instead.
That may just be to help avoid people planning poorly and running out of battery trying to just barely make it back to the return. There's almost certainly nothing magical about 10%, and charging the car from 5% will be almost no difference. It wouldn't surprise me if they don't charge a fee as long as they can still get it over to the cleaning bay or a parking spot with a charger.
They're likely just setting ground rules for people who have never used EVs. It's not quite as easy to solve if you run out of juice half a block away from where they want it to be returned. Or if it won't start but you got it parked in a spot out front without a charger. "It doesn't need to be full but please leave 10%" is a fair rule of thumb.
> If you don't require your customers to return a full vehicle, they don't need to deliver them full to the customer either.
Every U-Haul I've rented in the US works the way you're describing: you fill it to where they tell you. Not to a full tank.
rent the car in the morning, keep it for a while, you bring it back some evening, it gets rented out the next morning.
It's like hotel rooms. Sure you could clean them in 5 minutes after someone steps out the door, but is someone actually there to take the room afterwards?
sales dude: you want to prepay for that full tank of gas, super cheap only for you my friend, just today
me: no
sales: if it's not full it's going to cost 50% more
me: no
sales: look at the gas station prices
me: I never return with completely empty tank so whatever savings get wasted on the fuel I gift you on return
sales: but it's so much cheaper
:%s/gas/electricity/g
That does sound crazy that they re doing it while they ll be still in pandemic, which bankrupted them in the first place. I guess in the US people can always find a charger. I wonder how many people will rent those cars for the novelty factor, and novelty only works once. And it will be interesting to see what people think after they have rented one
> it will be interesting to see what people think after they have rented one
They will absolutely love it, just like I did when I rented one on Turo and then bought a new one the very next day. Also, the Hertz crowd is exactly the right target customer for Tesla. All of which shows how brilliant this deal is for Tesla, and how incentivized they must have been to make it happen. Which likely answers the question above.
Personal anecdote but I already am generally willing to pay a slight premium for Hertz over other rental companies and would be willing to pay slightly more still if it meant renting a Tesla.
There are companies offering EVs for short-term rentals by the minute or hour, but not as many of the big companies which seem to treat EVs more as a curiosity and group them with Maseratis or Luxury SUVs in terms of price and availability.
I hope this news is enough to shake up the leadership at the other car rental companies.
Non-Tesla (i.e., cheaper) EVs have been in the same boat - the ones that people want just flat out haven't been available in most locations.
Of course, the answer with most electric car charging questions is "charge it at home", which is great when you own the car, but when you're on a trip who knows what the hotel's infrastructure will be like.
That being said I also don’t know what the turnaround on a returned car is when on a busy lot. Minutes? Hours? Days? They gotta wash and vacuum it at minimum.
My guess would be a couple hours. They could start charging them right when you park at the return line…
With gas cars, there's a clear cost to having an employee go out and refuel it if its not returned full. This is much less justifiable if the company can just charge the cars on-site, either quickly or slowly.
A compromise could be that if a car is returned with less than x%, where it must be charged before going out to the next customer, then charge more but if its returned with 80-100%, don't charge extra because it could go out to the next customer easily. I've rented plenty of cars without a full tank.
Though I think another issue could be wear and tear on the battery as you're not supposed to charge to full - can rental companies software lock the charge rate? Not yet as far as I know.
https://electrek.co/2021/05/24/tesla-found-guilty-throttling...
Though, he has also tweeted many other things that have yet to become reality...
He told me that the deals the rental companies have with the manufacturers are along the lines of "you will buy 5000 cars at a large discount, but you can't sell them until they have 5000 miles on the clock". So they buy lots of cars at a HUGE discount and then later sell them for MORE than they bought them for.
If this is true, then it makes sense for the rental companies to invest in EVs, because (a) there is customer demand for them, but more (b) because the market for second hand EVs is good.
https://www.teslarati.com/tesla-model-3-hertz-full-price-ord...
I think rental cars have a lower value/prestige compared to single-owner used cars (the idea being people are rougher and more careless with a rental they only use for a few days).
But I’ll definitely be checking the battery and motors before buying a used EV.
Hertz just declared itself bankrupt a year ago, now they have 4bn cash to spare? Both things cannot be true in such a small timespan.
Either the 'bankruptcy' was a fraud, or the Tesla deal has some small letters like "of which we will acquire 1,000 per year for the next 100 years".
Sure, the official story is "we were bankrupt but we found new investors at the most convenient time", but that could've easily planned beforehand. Also, they raise 1.65bn [1], but suddenly spend 4bn? The math doesn't add up.
1: https://www.foxbusiness.com/markets/hertz-funding-stock-soar...
I didn't see any details on the purchase deal, but maybe they'll come out later. There's probably provisions to change the amounts, and certainly these vehicles will be financed in some form, whether that's Tesla financing or otherwise.
where did you get 4B from? presumably $40k per car multiplied by 100k cars? The cars are probably financed, so they don't really need the entire $40k upfront. Using the tesla leasing calculator https://www.tesla.com/support/tesla-leasing, a $40k model 3 only costs $19,299 for the first 36 months.
>Also, they raise 1.65bn [1],
the source you linked says the 1.65B is from coronavirus relief. It doesn't preclude them from raising more through other channels, eg debt/equity.
On Turo (like Airbnb for cars), Teslas are unique in how disproportionately expensive they are relative to their purchase value. When I last checked, a Tesla Model 3 worth 50K would rent for up to $200/day. Compare that to a comparable $50K BMW which might rent for $80. I imagine the reason is that people just want to rent a Tesla to see what all the hype is about.
Also, rental companies only keep their cars for about a year, so this situation doesn't have to last long for it to be profitable for Hertz.
But a Model 3 is absolutely a perfect rental car. Compact, zippy, comfortable, and makes you look good if you pull up to a meeting out of town in one.
Rental companies buy cars on leverage, and sell them used after a short lifespan. They sold off their inventory at the start of the pandemic and now can’t refill due to chip shortages, etc.
The used market is also crazy inflated, currently, but these companies couldn’t take advantage of that appreciation.
In fact, electrics open up a whole world of pricing and customer ripoff models.
Instead of charging you $5 a gallon, they can even charge $.50 per kWh (or translate it to miles) and that's something like a 3x markup. Even more if they use a renewable energy source.
In my rough calculations, it costs something like $5-$7 to charge from empty to full on my Model-3 mid-range.
And having a charger at the hotel you stay out won't be enough considering how many times I have filled up the tank the night before, but they could still tell that I used gas just driving from the hotel to the airport.
https://insideevs.com/news/371826/amazon-electric-delivery-t...
[1] https://www.statista.com/statistics/470829/us-car-rental-ave...
Hertz is just out of bankruptcy, and immediately they order 100,000 Tesla to be delivered, and so paid I guess, in just 1 year!
Let's imagine that they have the Tesla with a very good discount: 30000$ a piece.
That would cost them:
100 000 x 30 000 = 3 000 000 000 $
I have hard time to believe that they have that cash in hand, or that they can borrow that much!
In my opinion, this might be the long awaited event that will finally blow the bubble:
Like for Evergrande, market will discover that Hertz can't afford that, then the stock of Tesla will tank, then panic and crazy stock crash will follow.
What do you think about that?
"To be clear, cars sold to Hertz have no discount. Same price as to consumers."
https://twitter.com/elonmusk/status/1452794619410927625?s=20
It’s not a bet concerning whether or not Hertz has $3B cash on hand, it’s a bet if the lender thinks Hertz branding is good enough to pay the note. I would bet so.
Finally, there may well be a cross-collateralization with the Hertz family to make this deal pencil out.
A fleet of Tesla cars in a glorified cave taking tourists from point A to point B which was marketed to be a Boring company project with that concept video that blew everyone's mind off. It may as well be an underwhelming private transport facility that resembles a lazy river [0] being marketed as revolutionary public transport system [1].
[0] https://techcrunch.com/2020/10/16/elon-musks-las-vegas-loop-...
[1] https://electrek.co/2021/06/09/boring-companys-las-vegas-loo...
What if the loan is secured by $5 billion in assets from their current fleet?
While I daily-drive an EV, I'm pretty sure I wouldn't want one for a rental just yet. Charging infrastructure isn't quite to the point that you can teleport to some random place and not need to think at all about anything. Tesla is closer to that than anybody else.
I also tend to just drive more when I'm traveling, and so the range limitations will be much more meaningful under those circumstances than normal. My Bolt gets me about 240-280 miles of real driving per charge and it's totally fine for everything I normally do.
Of course I applaud Hertz for supporting consumer choice in this regard. Different folks will have different needs on different trips, myself included.
American car makers dug themselves a hole because there were a few populations that would buy American cars no matter how bad they got: refugees from WWII (e.g. old Italians, Poles, Jews and Veterans who would never buy a German or Japanese car), police departments, and rental cars. In a case like that the Ralph Naders and the Consumer Reports can be pointing out how bad your product is but they can point to people who still buy it, cover their ears and sing "la la la".
In principle renting a car could be an experience like "I drove a Buick and I liked it" (happened once to me) but more often the vehicle has been trashed, things like the controls for the seat position are busted, etc.
Car rentals move some metal in the short term but they damage the brand in the long term.
I asked about refunding my pre-paid rental then, and started finding an Uber to Enterprise.
"Oh, sorry sir. Prepaid rentals are non-refundable."
Right, so you take my payment, and then decline to rent to me, and then refuse to refund me? They did, eventually.
That being said I’ve never had a bad experience with national or enterprise. I dunno why other companies haven’t copied the Emerald Isle concept yet. It makes so much sense. The customer gets to feel like they had control over the car they picked, the time spent in line is non existent, etc. Its a win all around.
Also life pro tip: unless your employer can do better, always use Costco Travel for rental cars (and hotels for that matter). They always include multiple drivers, and have very competitive pricing… sometimes lower than what I can get using my employer’s corporate rate. The Costco membership almost always pays for itself just by renting a car for the week.
You don’t drive to the charging station. Those are essentially for road trips.
Tesla basically rides on their marketing propaganda. I'll stick to my 35mpg Toyota SUV thank you.