Hertz Buys 100000 Teslas $4.2B +50 000 for Uber. Avis expanding EV too

[Jeroen3]

I think this topic is best split to its own thread.
Wow, no discount on 100,000 cars. Why would you do that?

Because they don't need to. They can sell every car they make and then some.
I'm sure VW & others would have bent over backwards to get that deal.
For a rental company, I'm sure the supercharger network was a major deciding factor.

I guess a better question is as a rental car company, why would you buy a massive order of cars with no discount when as you say, a company like VW probably would have bent over backwards and provided a huge discount.

From what I read Tesla still is superior in EV-feature-wise, range, charging, built-in all around dashcam, key management via smartphone. Very nice for rental fleets I suppose.
And, note sure if they will, but they could drive themselves from the parking lot to the office where you rented one, would be awesome right?

Yes, VW and others probably have better overall durability, but I think that maintenance wise the EVs are cheaper anyways.

[sandalcandal]

There's so much ridiculous cognitive bias and lack of intellectual honesty here I don't I'd better stop wasting my time.

I'm sorry to say but that's almost always that way when dealing with this person, sadly, because I know he could do better.

Well, to be more clear I'd would need to start writing books instead of short posts. But since I don't have time to write books you have to make do with the short posts. And I will admit I'm not the best communicator out there. People either get it or not.

The issue is of quality, not quantity (length of posts or details). Maybe I've made it feel like you could be more convincing if you just added a more detail because I'm trying to give concessions where possible give you the best chance of proving your assertions but to make it completely explicit, there is a problem with the quality of thinking behind the posts you made (in my opinion) not quality of writing or quantity of details.

[EEVblog]

Wow, no discount on 100,000 cars. Why would you do that?

Last year Tesla produced 500,000 vehicles, it might manage 750k this year.  It's a product that Tesla has no problem selling at it's current production level, there's little incentive  to give a big discount to a bulk buyer, it's the same amount of work and if they could just as easily drive them off the line to the "general sale" lot instead of the "deliver to Hertz" lot.

The publicity is worth it though. Tesla's are kinda meh these days, the buzz is wearing off.
In this case it worked out, they bought them anyway. But what is they decided to buy 100,000 IONIQ 5's instead?

[EEVblog]

I think this topic is best split to its own thread.
Wow, no discount on 100,000 cars. Why would you do that?

Because they don't need to. They can sell every car they make and then some.
I'm sure VW & others would have bent over backwards to get that deal.
For a rental company, I'm sure the supercharger network was a major deciding factor.

Yes, I suspect so.
You don't want millions of Joe Average's complaining about not being able to charge it.
Still, I guarantee you'll see plenty of this:

[ejeffrey]

Wow, no discount on 100,000 cars. Why would you do that?

Last year Tesla produced 500,000 vehicles, it might manage 750k this year.  It's a product that Tesla has no problem selling at it's current production level, there's little incentive  to give a big discount to a bulk buyer, it's the same amount of work and if they could just as easily drive them off the line to the "general sale" lot instead of the "deliver to Hertz" lot.

The publicity is worth it though. Tesla's are kinda meh these days, the buzz is wearing off.
In this case it worked out, they bought them anyway. But what is they decided to buy 100,000 IONIQ 5's instead?

In the US at least there is still nothing with even remotely the same buzz as Tesla.  Hertz needs the buzz more than Tesla.  As good as I have heard the ioniq 5 is, the average American rental car customer is just going to see it as a boring Hyundai that they don't know where to charge.

[james_s]

Yes, I suspect so.
You don't want millions of Joe Average's complaining about not being able to charge it.
Still, I guarantee you'll see plenty of this:

When I was driving my dad's Tesla there were a a couple of times when the charge was getting low and I was about to drive past a gas station and thought "Oh I should... oh wait..." It's hard to get out of that habit of "I'm low on fuel, I should stop at the next gas station I see."

[james_s]

In the US at least there is still nothing with even remotely the same buzz as Tesla.  Hertz needs the buzz more than Tesla.  As good as I have heard the ioniq 5 is, the average American rental car customer is just going to see it as a boring Hyundai that they don't know where to charge.

I definitely agree there. I've driven several different EVs, Kia, Nissan, Ford and they were perfectly fine cars, felt remarkably like driving any other economy car, nothing wrong with it but nothing remarkable either, just boring transportation appliances that happen to run off electricity instead of gasoline. Tesla on the other hand is in an entirely different class. I've driven a few quite powerful ICE cars, stuff like BMW M3s, one that had an aftermarket supercharger and was really quick, WRX STi, that sort of thing. None of those match the performance of even a base model Tesla, it's not even close. A Tesla 3 or Y is in exotic supercar territory, at least at the speeds a sane person would drive on a public road. The only vehicle that I've ever been on that is even remotely in the same class is a sport bike and that isn't really a fair comparison to a car. As much as I hate the dashboard design of the Tesla, I would just about consider buying one if I still drove enough to be in the market for a newish car. There's just nothing else like them on the road, they have no competition.

[EEVblog]

Yes, I suspect so.
You don't want millions of Joe Average's complaining about not being able to charge it.
Still, I guarantee you'll see plenty of this:

When I was driving my dad's Tesla there were a a couple of times when the charge was getting low and I was about to drive past a gas station and thought "Oh I should... oh wait..." It's hard to get out of that habit of "I'm low on fuel, I should stop at the next gas station I see."

I can see it beign a huge intitial problem with electric hire cars. Only a very small percentage of people are familar with driving an electric car and the potential planing required.

[nfmax]

This should increase the incentive for hotels, conference centres, airports & the like to install Tesla chargers, to attract the business traveller using Hertz cars. Some exchange of funds may take place, though in which direction I'm not sure.

I would expect "Valet charging" to become a thing, as well

[sandalcandal]

Apparently Tesla and Hertz haven't even signed a contract (yet)?? Starting to smell a bit fishy
https://twitter.com/elonmusk/status/1455351085170823169

[...]
I’d like to emphasize that no contract has been signed yet.

Tesla has far more demand than production, therefore we will only sell cars to Hertz for the same margin as to consumers.

Hertz deal has zero effect on our economics.

[EEVblog]

Apparently Tesla and Hertz haven't even signed a contract (yet)?? Starting to smell a bit fishy
https://twitter.com/elonmusk/status/1455351085170823169

 
Maybe they just entered 100,000 into the web shopping cart and got a quote.

[sandalcandal]

Apparently Tesla and Hertz haven't even signed a contract (yet)?? Starting to smell a bit fishy
https://twitter.com/elonmusk/status/1455351085170823169

 
Maybe they just entered 100,000 into the web shopping cart and got a quote.

Maybe it was mostly intended as a PR play? Getting the US grid iron star for their ads probably wasn't cheap but maybe not that much compared to $4.2B?

[EEVblog]

Apparently Tesla and Hertz haven't even signed a contract (yet)?? Starting to smell a bit fishy
https://twitter.com/elonmusk/status/1455351085170823169

 
Maybe they just entered 100,000 into the web shopping cart and got a quote.

Maybe it was mostly intended as a PR play? Getting the US grid iron star for their ads probably wasn't cheap but maybe not that much compared to $4.2B?

With hindsight it's obvious what happened here. Here is hte actual press release:
https://ir.hertz.com/2021-10-27-Hertz-Partners-with-Uber-to-Add-Up-to-50,000-Teslas-to-Uber-Network-by-2023

No where in there does it say htey actually ordered 100,000 Tesla's, but in fact says

On Monday, Hertz announced its most significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across Hertz's global operations.

That means they will order them but the end of 2022. The media ignores that and runs with the juicy headline.

[Gyro]

I wonder if this means that there will be a glut of second-hand Teslas coming onto the market in a few years time. If so, i wonder when this will be? They normally wait until the engines run out of oil before they offload them. That will be more difficult with EVs, maybe wait until the tires are down to the fabric!

[sandalcandal]

With hindsight it's obvious what happened here. Here is hte actual press release:
https://ir.hertz.com/2021-10-27-Hertz-Partners-with-Uber-to-Add-Up-to-50,000-Teslas-to-Uber-Network-by-2023

No where in there does it say htey actually ordered 100,000 Tesla's, but in fact says

Wrong news piece. Look at the dates and number of Teslas. This happened after the original 100 000 announcement. This is the "(Update: potentially expanding to 150 000)".

Hertz also entering partnership with Uber to offer 50 000 Teslas for Uber drivers in the US
https://www.reuters.com/business/autos-transportation/uber-partners-with-hertz-offer-50000-tesla-rentals-us-ride-hail-drivers-2021-10-27/
https://www.cnet.com/roadshow/news/uber-rent-tesla-partnership/

Also looks like they plan to increase the fleet size further to 150 000 over the next 3 years in response to the deal with Uber and public interest
https://www.reuters.com/business/autos-transportation/hertz-says-it-could-provide-150000-teslas-uber-up-an-initial-50000-2021-10-28/
https://www.nasdaq.com/articles/hertz-says-it-may-expand-supply-of-teslas-to-uber-to-150000-2021-10-28

Here is the correct one dated 2 days earlier: https://ir.hertz.com/2021-10-25-Hertz-Invests-in-Largest-Electric-Vehicle-Rental-Fleet-and-Partners-with-Seven-Time-Super-Bowl-Champion-Tom-Brady-to-Headline-New-Campaign

As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company's global operations.

[BrokenYugo]

I wonder if this means that there will be a glut of second-hand Teslas coming onto the market in a few years time. If so, i wonder when this will be? They normally wait until the engines run out of oil before they offload them. That will be more difficult with EVs, maybe wait until the tires are down to the fabric!

That is an interesting point. I imagine if nothing else they'll dump them past a certain point of battery degradation, people won't be happy if they rent a 300 mile electric car that won't actually do 300 miles. Google says Tesla claims like 90% capacity@200k miles, but that's certainly not accounting for beating on it like rental car and probably level 3 charging whenever available.

[james_s]

It will be an interesting real world test of the cars and I will be curious to see the results if they are made available. I think what is most likely is the cars will be sold off when they start to get a bit tatty looking. Worn upholstery, interior smells, dings and dents, curbed wheels, most rental car companies try to provide clean good condition cars.

[sandalcandal]

Avis jumping on the the EV hype train too

“You’ll see us going forward be much more active in electric scenarios as the situation develops,” Chief Executive Officer Joe Ferraro told analysts on a conference call Tuesday.
[...]
“The reason you haven’t heard from us publicly is because for competitive reasons, we like to execute on our strategy before announcing it,” Chief Financial Officer Brian Choi said on the call.

https://www.bloomberg.com/news/articles/2021-11-02/avis-ceo-says-he-ll-add-more-electric-cars-to-fleet-over-time
https://www.yahoo.com/news/avis-shares-more-double-revenue-141002555.html (free reprint)

[floobydust]

I don't think Tesla can fill these orders anyhow.
4680 battery demand is through the roof, Texas Gigafactory still is not in production and it's been 16 months, still erecting steel.
Gigafactory Berlin looks about in the same state.

Oh yeah, how's the Cybertruck. Did you pay the deposit Nov. 2019 only to to not know the final selling price and wait wait wait lol.
It does take years to build capacity, but the marketing hype and blind investors have the cart before the horse.

How's the resale value of Teslas? I have to confirm but an acquaintance wanted to trade in X P100D two years old and Tesla offered CAD $85K- which is quite the hit.

[EEVblog]

Here is the correct one dated 2 days earlier: https://ir.hertz.com/2021-10-25-Hertz-Invests-in-Largest-Electric-Vehicle-Rental-Fleet-and-Partners-with-Seven-Time-Super-Bowl-Champion-Tom-Brady-to-Headline-New-Campaign

As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company's global operations.

Exactly the same wording. And it's very deliberate to make you think they have just ordered 100,000 Tesla's. Standard marketing trick.

[sandalcandal]

How's the resale value of Teslas? I have to confirm but an acquaintance wanted to trade in X P100D two years old and Tesla offered CAD $85K- which is quite the hit.

Resale value of Teslas is abnormally high from what I've seen. Your acquaintance was probably getting screwed around with a trade-in offer.
https://www.iseecars.com/cars-to-buy-used-study
https://www.carsales.com.au/editorial/details/advice-what-is-my-used-electric-car-worth-120962/
https://www.caranddriver.com/news/a33935142/tesla-model-3-depreciate-electric-car/

[sandalcandal]

Here is the correct one dated 2 days earlier: https://ir.hertz.com/2021-10-25-Hertz-Invests-in-Largest-Electric-Vehicle-Rental-Fleet-and-Partners-with-Seven-Time-Super-Bowl-Champion-Tom-Brady-to-Headline-New-Campaign

As consumer interest in electric vehicles (EV) skyrockets, Hertz today is announcing a significant investment to offer the largest EV rental fleet in North America and one of the largest in the world. This includes an initial order of 100,000 Teslas by the end of 2022 and new EV charging infrastructure across the company's global operations.

Exactly the same wording. And it's very deliberate to make you think they have just ordered 100,000 Tesla's. Standard marketing trick.

Well, they are doubling down on their claims.

“As we announced last week, Hertz has made an initial order of 100,000 Tesla electric vehicles and is investing in new EV charging infrastructure across the company’s global operations,” she [Lauren Luster] said in an emailed statement. “Deliveries of the Teslas already have started. We are seeing very strong early demand for Teslas in our rental fleet, which reflects market demand for Tesla vehicles.”

https://www.cnbc.com/2021/11/02/hertz-says-teslas-already-started-delivering-cars-despite-musk-tweet.html
Musk tossing Hertz under the bus a bit here lol

[floobydust]

Resale data seems to be based only on a "lightly-used" Model 3 at the one website so I am suspicious.
I mention it because rental cars are usually young, they don't keep them around. Not sure how old Hertz' fleet is, but it would be interesting to see how long they plan to run them.

This is hilarious, glad I got the horn fart sound update:
"One reason Teslas defy the high depreciation of the EV segment is because over-the-air software updates help keep even the older versions current. As such, consumers are likely willing to pay higher prices for the Model S and Model X than what they are willing to pay for other used luxury vehicles."

So far this Hertz deal announcement seems premature.

[ejeffrey]

How's the resale value of Teslas? I have to confirm but an acquaintance wanted to trade in X P100D two years old and Tesla offered CAD $85K- which is quite the hit.

I'm not sure what the trade-in value is but the private party resale price and the Tesla used vehicle prices are pretty high, some of the highest in the industry for their segments.  Luxury cars in general do loose a lot of value in the first few years, and especially high trim / highly optioned vehicles vehicles are often worth barely more than the base model.  Still $85k sounds low for such a vehicle unless it was very high mileage or had something wrong with it.

[james_s]

"One reason Teslas defy the high depreciation of the EV segment is because over-the-air software updates help keep even the older versions current. As such, consumers are likely willing to pay higher prices for the Model S and Model X than what they are willing to pay for other used luxury vehicles."

I find frequent updates to my gadgets to be a nuisance rather than a desirable feature. Go ahead and patch security holes but don't screw with the UI/UX. I've been burned so many times (not by Tesla but I don't own one) by updates that broke stuff that I'm extremely hesitant to update anything. Every time I do give in and let something update that breaks something or makes it worse it reinforces that feeling.