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.
The older 500e was a “compliance car” that only gets about 80 miles of range and doesn’t charge very quickly m. Fine for going to the grocery or maybe work if it’s nearby. That’s about it.
The 2024 model isn’t much better. Only about 120 miles of range and hella expensive for what it is. You’d be better off getting something else with fast charging and 200 miles or more of range.
I mean that’s fair about the earlier model, 80 miles would be tight, even for a local commuter.
However, I really am a local commuter, it’s part of how I keep low miles on my vehicles post-purchase, and while 80 miles of range feels a little tight for a busy day. 120 miles, well… I think I’ve maxed out a daily trip of “getting shit done” at 100 miles, so in my particular use-case, 120 miles would leave me about a 20 mile buffer on my busiest of days.
So, for me at least, the newer model is actually relatively in-line with my needs, but still several years away from being affordable used, considering the cheapest 2015 model I see is $5000 (with more of them in the $7k-10k range), and its a 9 year old vehicle. I’ll still be pushing my sixties before I can really afford one, likely. Which is in line with my original point: most poor people will spend their lives still driving ICE vehicles.