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.
Everyone seems to miss the “higher expenses related to collision and damage” part which is actually the most important part.
Why would electric cars crash more often than ICE cars? EV and ICE cars should drive exactly the same. I know my electric Berlingo drives exactly the same as ICE Berlingo.
Maybe the reason is that some popular EV brand makes cars that are dangerous to drive by installing non-standard steering wheels, turn signal switches and touch screens instead of buttons (not to mention too powerful engines)? If that’s the case it says nothing about EVs in general and definitely doesn’t indicate there are ‘hidden’ costs to EV ownership. Just don’t buy bad EVs only because they have more range.
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.