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Hertz increased its fleet of EV rental cars – then, profits exploded
- endisneigh 4y agoThough I do think EVs to be better in terms of maintenance. I've had family members drive multiple ICE cars (Corolla and Civic respectively) over 200,000 miles. I honestly doubt modern ICE is that expensive to maintain.
- cs702 4y agoAccording to the OP, Hertz has found that EVs are "between 50-60% cheaper to maintain than gasoline-powered cars." That's a huge difference. It means that the cost of using an ICE vehicle over time is 2x greater. If the figure is anywhere near accurate, ICE vehicles are toast.
- metadat 4y agoStrange claim, because Hertz's fleets are comprised of new and almost brand new vehicles, which usually only require oil changes. Then they sell them off after accumulating 10,000-25,000 miles, before any real maintenance is required. 20,000 miles is what, 4-6 oil changes?
- belval 4y agoAn explanation could be that people driving Hertz cars are not optimizing for car longevity which breaks more stuff earlier? Also 10,000-20,000 miles in pure city environment can still take a toll on the brakes which the EV would be more resistant too because of regenerative breaking.
- dsfyu404ed 4y agoSome employee has to take those cars to jiffy lube (or whatever oil change place is contracted with that Hertz location to provide fluid changes) to the tune of $20/hr. I can see that dominating costs. And on top of that the average EV probably has low(er) rolling resistance tires (to get a few more miles of range) which get replaced every 40k instead of whatever sticky tires the OEM slapped that only last 30k so you're doing that routine less too.
- bluedino 4y agoProbably closer to 3 if they are following the cars oil life monitoring system
- diamondo25 4y agoI think the main issue is how people drive these cars. If you have a lot of short trips, or overrevving, or just in general abusing it (because rental), is much more common on ICE cars compared to electric ones?
- toast0 4y ago> 20,000 miles is what, 4-6 oil changes? Most new cars have a 10,000 mile factory oil change interval. PHEVs usually go for 20,000. Rental cars sometimes have a hard service life, but I'd put that range at maybe 1-2 changes. Which isn't much at all. More likely there's a usage difference; if you're puttering around from the airport to the hotel and back, you might pick an EV, but if you're renting a car to drive a longer distance one-way trip, it's mostly going to be an ICE, and you're gonna put some miles on it at high speed, etc.
- metadat 4y agoThanks for the info, toast0. Minor clarification: Highway miles are actually gentler than city / town miles. Less wear and tear due to stop and go traffic, 90 degree turns, and fewer potholes.
- toast0 4y agoThey're generally gentler, but it kind of depends on the highway. The speeds also mean more consequences of any pothole or other obstruction, too. But mostly the observation is that you'll likely get a lot more miles on the car in such a rental than a local rental. So a rental company that keeps a car in their fleet for 2-years or 20,000 miles is going to likely send most EVs out for age and more ICEs for milage (in my estimation, anyway), and so sure, ICEs will have oil changes in that interval, but they'll also have more of the every car needs maintenance sort of proportional to use (runtime and/or mileage), because they'll see more use.
- fiftyfifty 4y agoOil changes probably explains the difference. We have 70,000 miles on my wife's Tesla and it's never gone in for any maintenance. We've replaced the tires on it twice now (Tesla's do eat tires) and I've replaced the cabin air filter a couple of times and fill up the windshield washer fluid about once a year.
- ip26 4y agoHere’s an interesting question- do they need to sell off EV’s after only 25,000 miles? Does simple maintenance reduce the turnover rate & associated costs?
- pjc50 4y agoThe article mentions failures. Presumably it's quite an expensive hassle if a customer's car fails and you have to provide them with another one on top of the cost of the actual repair. Interestingly JD Power claim that EVs have more problems https://techcrunch.com/2022/06/28/jd-power-evs-and-and-plug-in-hybrids-have-more-problems/ https://techcrunch.com/2022/06/28/jd-power-evs-and-and-plug-... .. but mostly in the infotainment system? Maybe that matters less to rental drivers. Maybe that depends on brand.
- CydeWeys 4y agoI would be curious to see absolute values on this rather than percentages. Not having to do oil changes could easily be a 50% decrease, but oil changes also really aren't that expensive overall on a few tens of thousands of miles, right?
- asciimov 4y agoRental Companies are notorious for not doing scheduled maintenance on cars.
- oxfordmale 4y agoI wonder if the second hand price of EVs makes a difference. Until recently you could pretty much drive a Tesla for free for the first two years, as the second hand value hardly deprecated.
- Majestic121 4y agoWhile those numbers are extremely encouraging, the fact that this is on a new fleet is to be kept in mind. What we know now is that they 50-60% cheaper to maintain during the first couple of years. Let's hope that they are also 50-60% cheaper to maintain over their whole lifetime, but this might not be as assured as one might think due to batteries which are a huge cost.
- metadat 4y agoEV maintenance items should only involve tires, air filters, and wiper blades and fluid. My friends with Teslas have reported that these are the only things they've done in 50,000+ miles.
- treeman79 4y agoSo same as a gas car minus oil changes.
- metadat 4y agoI'm not going to put the entire ICE maintenance list here, but there are a lot more wear items. Brakes, belts, coolant, oil, transmission service, annual emissions inspections. Radiator or other leaks.. pretty annoying. The maintenance schedule is definitely more involved. Edit: lostlogin, sure.. that's a, uhm, certain strategy. No doubt, Japanese cars can usually take an impressive amount of abuse. And yeah, a harsh way to treat a machine you rely on to keep you and your loved ones safe.
- lostlogin 4y agoIt can be, but our 2 corollas have had an oil change each in 10 years, one got a set of tyres and one needed brake pads and rotor skimming. It’s a terrible way to treat cars, but they go fine.
- DangitBobby 4y ago
- lm28469 4y ago> ICE vehicles are toast Let's wait, my dad traded his 20 years old car for a new model a few years ago, he paid 8k euros for a brand new ICE car, he does under 10k km per year now. The cheapest EV I can find is 22k euros here, and it's a piece of shit that barely does highway speed, which he could not afford anyways. Companies will make public charger more and more expensive until it reaches the price of filling a gas car, it's just matter of time, mechanics will do the same. In the meantime it's all tricks and snares, enjoy it while it lasts
- astura 4y agoWhat car is only €8k new? I don't think there's anything in that price range in the US market..
- asciimov 4y agoThose are short term ownership costs. Major Rental Companies often pull cars between 35k-50k miles, which they can pile on the car in 12 months. For most modern cars that is a couple of oil changes, but before the long term maintenance items crop up like tires, which on EVs are more expensive.
- briandear 4y ago> This is good news for the planet, as studies show that EVs create less carbon pollution than conventional gasoline-powered cars, even after accounting for energy expended to produce, transport, and charge them How about the mining of battery materials and the effect of that? Or the disposal of batteries. This article is pretty biased in that it fails to address the externalities of the entire EV lifecycle.
- capableweb 4y agoWouldn't that be a part of the "energy expended to produce" part of the statement? Maybe it's intentionally ambiguous, misleading if so.
- ajross 4y agoCan we please stop with this copypasta in every EV thread? None of that is genuinely sustained by numbers, it's all just FUD. Batteries are, and have been for decades, among the most productively recycled materials. The number you see thrown around that Electric Vehicle batteries are not often recycled is down to the overwhelming majority of EV batteries still being productively used in their original installation. There are better arguments, FWIW, about "EVs as personal transportation" that point out that battery production is going to be constrained as the industry evolves and that the comparatively few batteries we have should be prioritizing transit and grid storage vs. more Model S's. And I think there's a reasonable argument there (though the response will be that high margin luxury products are a much more effective way to grow that market than boring stuff). But no, there's no one serious out there claiming that batteries are a bad environmental tradeoff.
- mtmail 4y agoI wouldn't expect a 368 word article go to deep into all EV lifecycle issues or studies.
- jakewins 4y agoI’m confused why you think production and disposal aren’t part of the data going into that statement. Every comparison I’ve seen includes battery production in the life cycle analysis. Do you have an example of a full - ”cradle-to-grave” - life cycle analysis that shows EVs to have higher total emissions over their life span?
- almost_usual 4y agoNot many details on what components failed or how maintenance is better. I don’t doubt the claims but this feels like greenwashing PR.
- CydeWeys 4y agoIt's widely known that maintenance costs way less on EVs than on gas-powered cars. There are plenty of data points everywhere to confirm this. EVs are much simpler with way fewer moving parts and fluids to worry about.
- danuker 4y agoI think it remains to be seen, as batteries wear out. That could take years.
- elil17 4y agoThat may be true, but from the perspective of a company like Hertz they are covered by the standard 8 year warranties offered by most EV manufacturers because they do not keep cars that long anyway.
- eigen 4y agodo batteries wear out in the lifetime of a rental car? I would think the batteries have a lifetime of at least 10 years whereas a rental agency only keeps the car for <4 years.
- astura 4y agoIdk how true this is, but I keep hearing that car batteries have gotten so good they are likely to outlive the car. Anyways, these are rentals, which are usually sold after around 1 year/30,000-40,000 miles. So it's irrelevant for a rental car company if batteries last longer than that.
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- sidewndr46 4y agoMaybe after arresting their customer base they decided to revert back to doing actual legitimate forms of business?
- CydeWeys 4y agoRental cars are prime candidates for EVs as they get driven a lot more than the average car. I don't own a car, but whenever I rent one I'm putting a lot more miles on it per day than any car I ever owned in the past. I only rent cars when I know I'll be doing a lot of driving, so it makes sense (otherwise I'd just take a few taxis/Ubers).
- gruez 4y agoThe most typical rental car use case I can think of is you traveling to a random city and needing transportation, either for a business trip or on vacation. In either case, I'm driving in an unfamiliar city, to a bunch of random places. The last thing I want in that scenario is having to worry about where I can charge my car. Finding parking is already enough hassle enough.
- CydeWeys 4y agoI'm not worried about it. There's apps and websites that show you all the charging locations. You have to figure out much more complicated stuff than that while traveling. I'd love to get an EV rental but I'm not willing to pay extra for it and luck hasn't smiled my way yet. I also don't use Hertz, mostly Avis, and I'm guessing they don't have nearly as many EVs.
- gruez 4y ago>There's apps and websites that show you all the charging locations and what if the conference center/tourist attraction you're going to doesn't have a charging station? What if they do, but they're broken/occupied? I agree it's not an insurmountable task, it's just something I don't want to have to worry about while I'm dealing with the other "much more complicated stuff".
- CydeWeys 4y agoApparently you don't need to return EVs charged, so it would've been less hassle for me on my most recent rental. I had a car for 4 days in Las Vegas and drove around 250 miles total. I had to go out of my way when dropping it off for the flight to find a non-gouging gas station and stop there, whereas with an EV, I wouldn't have had to do that at all. Would've saved me $40 in gas too (which was 20% of the rental cost).
- justapassenger 4y agoI’m a fan of EVs, and drive them. But this is a horrible article. Throwing together few unrelated facts, without any context and making bold claims about how they connect together.
- jakewins 4y agoI’m 100% in the EV train, but this article is weird. It says they ordered a ton of EVs, and that EVs have lower cost of maintenance, awesome - but it provides no evidence that EV maintenance costs actually contributed to the improvements here? The statements they have from Hertz say “we made $$$$ from demand coming back to rent cars” and “we spent that $$$$ on buying EVs”. The quotes and facts in the article are not aligned with the point made in the title
- alexfromapex 4y agoI think a large majority of these EV analyses suffer from short-term biases as well. It will be interesting to see if the cost of maintenance remains super low when these vehicles need battery replacements.
- greatpatton 4y agoWe already know the battery lifetime as many many electrical vehicles have reached hundreds of thousand of km... Anyway I don't think that Hertz really care as they are not going to keep the cars for that long.
- jakewins 4y agoYeah good point. I always imagined it as similar to transmission replacement - ie. If they can make the battery pack last as long as a median transmission, then it’ll be after the overall vehicles useful life before it comes time to replace. We will see. We just swapped the battery on ours, price if it hadn’t been done on warranty was $50K, on a car we paid $35K for.. but then again, cost to us was zero.
- hef19898 4y agoThose are rentals, so they run quite a few more charging cycles than private owned cars. On the other hand, rental companies write there cars off, and sell them early enough to maintain an up tondate fleet. So maybe batteries don't need replacement during the rental live, and companies don't care that much about resell value since the car is written off the books anyway.
- gruez 4y agoIs this really due to Hertz's electrification efforts, or just a broader trend (ie. lockdowns ending leading to more car rental use)? If we look at their competitor, we see that their profits rose even more (in percentage terms)[1]. Sure, being "50-60% cheaper to maintain" is nothing to sneeze at, but without analysis into how much that weighs against other factors (eg. depreciation, because electric cars are more expensive) making such bold claims is simply irresponsible. [1] https://www.macrotrends.net/stocks/charts/HTZ/hertz-global-holdings/ebitda https://www.macrotrends.net/stocks/charts/HTZ/hertz-global-h... https://www.macrotrends.net/stocks/charts/CAR/avis-budget/ebitda https://www.macrotrends.net/stocks/charts/CAR/avis-budget/eb...
- linuxftw 4y agoI'm also thinking about depreciation. I suspect most people that want an electric car are going to buy new, especially considering the tax credits. Are they going to be able to successfully offload 3-year old, high-mileage rental electric cars?
- timbit42 4y agoMy country has tax credits for used EVs and PHEVs. They're lower than for new vehicles but they exist.
- linuxftw 4y agoThis article is thinly veiled blogspam for the real article: https://thedriven.io/2022/10/31/hertz-sees-bigger-profits-as-it-accelerates-transition-to-electric-vehicles-and-lower-costs/ https://thedriven.io/2022/10/31/hertz-sees-bigger-profits-as...
- topkai22 4y agoEVs have less maintenance costs than ICEs in general, but they have particularly less maintenance requirements during the for the lifespan rental companies keep their cars, often less then 30k miles. During that time you are really just looking at oil changes, fluids, and filters, which EVs don’t have or have less of. Later in a car’s lifecycle you’ll start seeing things like tires, brakes (better with regenerative!), and trim start needing replacement, along with the battery. My older ICE’s most expensive maintenance issues in the last 2 years were the window regulators all failed- that has nothing to do with the power train. Which is all to say EVs are cheaper to run overall, but they are suited to save even more money for rental companies than individual consumers.
- RHSeeger 4y ago> My older ICE’s most expensive maintenance issues in the last 2 years were the window regulators all failed I had a car a number of years back where the window controls failed. Fixing it would have been so expensive (more than I could afford at the time) that I drove the entire NY winter with some plastic material taped over the top half of the window (as far up as it was when it failed).
- topkai22 4y agoYeah, I did that for the first one for a month because I couldn’t get in to a mechanic for weeks. After that, I searched “how to replace a window regulator in <my car>” on YouTube and then figured out how to do it myself. Turns out it was about 45 minutes for me to do it myself. Not only did I save money (about $500 for all of them), but I saved time- going to a mechanic always ended up being about 2h
- MontyCarloHall 4y agoAs others have pointed out, attributing the higher profits to lower EV maintenance costs makes no sense, since rental cars are purchased new and sold after 10-20k miles, which is long before any major ICE-related repairs need to be performed. The only ICE-specific maintenance in the first 10-20k miles is 2-3 oil changes, which seems negligible. I did notice that Hertz charges a flat $35 fee if you return an EV with less than 70% charge, with an additional $25 fee if the battery is below 10% [0]. I wonder if this is a big contributor to the profit margin: people rushing to return an EV rental car may not have time to recharge it to avoid the surcharge, whereas people returning ICE cars have time to refuel them. Also, the surcharge for returning an ICE car without a full tank is much lower; usually around $0.50 per missing gallon. [0] https://www.hertz.com/blog/electric-vehicles/tesla/model-3/faq/charging-the-model-3/ https://www.hertz.com/blog/electric-vehicles/tesla/model-3/f...
- toomuchtodo 4y agoWow! That’s obscene considering they have chargers at the lot to recharge the vehicles and the power costs them almost nothing. The perk should be able to return it on empty, as they can plug them right in at arrival. If Hertz wants to be able to turn the vehicles faster, they can install fast DC chargers at their facilities.
- Fatnino 4y agoRentals sometimes charge 10 dollars a gallon if you return it below where you got it. It's not because they then go to a gas station to refill it. They just rent the car to the next customer with only 3/4 of a tank and hope that second customer returns it full.