Why Hertz’s Bet On Tesla Isn’t Paying Off In The U.S.

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Published 2023-12-28
In October 2021, Hertz publicly announced it intended to buy 100,000 Tesla vehicles. Newly emerged from bankruptcy, Hertz had a bold plan to lead the EV revolution in car rental. Shares of Hertz soared, as did Tesla’s - its market value hit $1 trillion. First mover advantage aside, it would help Hertz distinguish itself in an industry plagued by commoditization. But only a couple of years in, the rental company’s EV strategy is facing some serious challenges: pricing troubles, skyrocketing repair costs and low resale values. Meanwhile big rental rivals are holding back on EVs. Hertz’s investors are divided over what to do next: either kill, or at least pause the EV initiative, or try to find a way to make it work. Meanwhile, the company is planning to reduce the share of Tesla vehicles in its fleet and buy more from other automakers.

Chapters:
1:38 - Chapter 1 - A bold bet
7:07 - Chapter 2 - What went wrong
11:21 - Chapter 3 - Fork in the road

Producer: Robert Ferris
Editor: Darren Geeter
Animation: Mallory Brangan
Senior Managing Producer: Tala Hadavi
Additional footage: Getty Images
Additional sources: Enterprise, Auto Rental News, Avis, Tesla, Deutsche Bank

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Why Hertz’s Bet On Tesla Isn’t Paying Off In The U.S.

All Comments (21)
  • @rsmeanie
    I was offered a Tesla rental from Hertz and when I asked how it worked and where to charge, the rep shrugged his shoulders and said he didn't know but I had to return it fully charged. The lack of training completely turned me off and I selected an ICE vehicle. If Hertz wants to know why Tesla rentals are failing, they need to look internally.
  • @Andrea-ni6tu
    Here's a crazy idea: put chargers at rental points
  • @BetaProductionz
    How simple is it to understand that no business traveler or vacationer would want to add “finding a charger” to the hassle of their trip?
  • @markf3908
    This report focused a lot on Hertz's business strategy and investor interest, I did not hear much on Hertz's terrible customer service. When a company rents vehicles with a stolen report still on them and gets its customers wrongfully pulled over and sent to jail while they sort things out, I don't know who in their right mind would want to rent from a company like that.
  • @Semiam1
    I don’t want to get accused by Hertz for stealing a $60K car.
  • Here’s another problem… Hertz. A brand that has distinguished itself by falsely overcharging customers, accusing customers of stealing vehicles, and suing customers.
  • @iii7878
    The last thing I want to worry about when renting a vehicle in an unfamiliar area is trying to find a charger. You can't charge at most hotels and air bnbs, and if I'm on a vacation. I don't want to spend my valuable off time waiting hours for my vehicle to charge when I could be enjoying various attractions.
  • I made the mistake of renting a EV. Only had 30% charge and was all they had in stock (I see why now). Had to wake up extra early to find a charge port to make the meeting. Ruined the whole day. Never again.
  • @brettrace
    Blame the customer seems to be the motto of these corporations
  • @spades9048
    That is such a Hertz move. Buy cars that are too expensive for the rentals they have — push those overpriced cars onto lower priced rentals because you want the cars to be showing revenue but then yell at the local managers when their car costs are out of control as if they are the ones responsible for purchasing.
  • @MrTeff999
    A common complaint seems to be the requirement to return with charge of 75%. Clearly, more people would rent a Tesla if Hertz lowered the minimum to 30%, and had chargers on site.
  • @KevinInPhoenix
    This aged like fine milk with Hertz selling off its EV fleet in the US.
  • @kasession
    This may be a minor issue, but when I was given a choice between EV and gas powered, I didn't hesitate to pick the gas powered. My issues were that I was traveling to a location that I was not totally familiar with in the evening and that I was going to be driving a couple hundred miles. There's already some anxiety there. I didn't want to add the anxiety of range and not knowing if there were charging stations along my route, or if any are at my destination.
  • @jjc4577
    I found it alarming that they were reporting cars stolen that were sitting in their lots and having the police arrest the last renter, regardless of the location of the vehicle or the fact that customers had a receipt they got when they turned it in.
  • @nbooky
    It's the charging infrastructure. I had several chances choosing an EV at Hertz at the same price as non-EVs. In both cases I picked hybrids. There are not sufficient chargers at hotels, and when traveling, I'd rather look for a gas station than adjusting my trip for a charging session. It was the right choices for both trips as I took mental notes along the way on charging opportunities - there was simply none.
  • In the UK, it costs over £100 per day to rent a small petrol powered hatchback. However, you can also rent a Polestar EV for £17 per day, which is worryingly cheap. Clearly there is little to no demand for EVs in the rental market. If there were, you can bet your house that EVs would cost a whole lot more to rent.
  • @maestrovso
    The bigger the bankruptcy, the bigger the spending the company promises after reorganization. It is the American way.
  • @christopherwarsh
    I was offered a Tesla as a rental but when the staff said I had to “return it full” that’s crazy stupid
  • @mwedzi
    We rented an EV (Tesla) with Hertz last year. Literally the worst rental experience of my life. Not only is Hertz customer service total garbage (we waited FOREVER to get the car we had pre-paid for), but trying to find a charger before our flight was a major headache. I wanted to make a quick stop to shop before our flight, and having to deal with charging prevented that. Still, we gave up (we charged once but the thing lost charge so quickly, we would have had to charge twice), and just took the penalty charge of not bringing it back at the same charge. Never again, for either EVs or Hertz.
  • Could it be that people renting cars don’t want to waste time looking for charging points in unfamiliar locations and then spending hours, rather than minutes, charging?