If the CEO of Hertz trusted a salesman (Musk) who had a personal stake in making the sale, and did not do any due diligence at all, which of the two was the fool here?
Hertz CEO says buying EVs was a big mistake and very costly to the company margins
- Thread starter alarmguy
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High total percentage and after service sales were the big hitters here well beyond mis management. It’s a gamble though. Tesla actually lowered prices and that just isn’t typical. If I was to start any business, car rental is the absolute last I’d choose. You’re tied to the market when you buy and tied to the market when you sell and every lesser company tries to undercut your prices. There’s a lot of liability at every step of the way and a crazy amount of cost involved to make what turns out to be a very small amount of money per day.
I like Tesla and will buy another. That’s personal use though. It would be too much a gamble as a business. It sounds bad but the possibility of totaling easily in an accident is a positive for me. I don’t want a wrecked and fixed car. It hasn’t went well for me in the past if it was at all beyond simple cosmetic.
CEOs don’t last in that company if it did happen. Less than legal practices seem to be the norm.
LOL. Trusting a salesman. Then that go broke or go home mentality of investing that kind of money should clear the launch pad.
Absolutely, did anyone say any different? But you do know, you must know, when a CEO or anyone of a nationally known brand (no less) looking to sell you millions in dollars in a product> CEOs and Boards rely on some of their statements. You have to and you know that company wants to build a relationship with you to keep selling products to you.
SO yes, Musk made a fool of him and Musk further cemented himself as someone who can not be trusted. Ummmm... hate to tell anyone but that is not the successful formula for world recognition to have CEOs around the world not trust a word you say.
It's worth reading the article because the CEO although laying out where losses were, didnt actually say either of the two quotes attributed to him in the opening post.
Since they aren't in this article, and we haven't seen a source for them actually linked, one can only conclude they were made up to push a narrative.
IF they were so bad for Hertz they probably wouldn't stay committed to them? (from the article)
Fortunately for Tesla, the rental agency remains committed to eventually expanding the 10% share of its fleet that are EVs to a milestone target of 25%, even if it is no longer committed to achieving that by the end of next year.
I have to pay to read the article, I won't. Call me old and cheap. I wish them well, a 25% commitment imo will dig the hole deeper, even if it takes longer than a year. Opinions will vary.
Maybe I can read it for free because I have a mac?
No idea. I'll take your word for what you wrote earlier.
Well good for them. Just seems to have failed literally everywhere else other than major population centers.
I an reminded of when Hertz bought Shelby GT 350s in the 60s. Big mistake.
It was before unlimited mileage and there was a big mileage charge. Renters would drive off the lot, disconnect the odometer, then take them to the race track and run a race. Those were the good renters. Others would take them and swap out the Shelby small block for a junkyard 289. Bring 'em back and the Hertz employees had no clue.
Hertz lost a small fortune on that fiasco. Too bad, those cars are worth their weight in gold today.
It was before unlimited mileage and there was a big mileage charge. Renters would drive off the lot, disconnect the odometer, then take them to the race track and run a race. Those were the good renters. Others would take them and swap out the Shelby small block for a junkyard 289. Bring 'em back and the Hertz employees had no clue.
Hertz lost a small fortune on that fiasco. Too bad, those cars are worth their weight in gold today.
Maybe that's what you did. When I used to get rental cars for work we drove the hell out of them.
When I rent them for personal use I'm usually picking them up at the air port, visiting family and traveling all over, bad match up for electric.
Last time we got a rental was when my wife's car was getting hail dent repair. An electric could have worked since I'm already setup for 240v charging, at least until we took it on a couple 700 mile road trips....
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I can read it with Windows 11 and Edge, no paywall.
I'm sure that wasn't Musk's original goal and I would have to assume he wanted it to be a long and lucrative relationship. I will say making such a stink in the way that the Hertz CEO has trying to blame Tesla for poor figures looks extremely unprofessional. It's kind of Musk-like.
Regardless the result is the result and while I think Hertz will continue to order Teslas as they have in the past, I can imagine those orders will be much smaller.
There are a lot of misconceptions in this post. From this article:
The EV costs were in repairs, not maintenance. From CEO Scherr:
“Our direct operating expenses remained controlled in the quarter as they grew with transaction volume. On a unit basis, we achieved productivity gains across most categories of auto. The exception remained vehicle damage costs, particularly those on our EVs.”
Tesla's EV price war has devalued used car values across the board; EVs more so of course. CEO Scherr point out that the price cuts are beneficial for future purchases; it ain't all bad.
Scherr said Hertz is still “committed” to buying 100,000 cars from Tesla and 175,000 EVs from GM, but is not on target to have EVs represent a quarter of its fleet by the end of 2024 any more as previously hoped.
Personally, I would not rent an EV; they don't fit my typical purpose for renting. I don't see that changing...
The EV costs were in repairs, not maintenance. From CEO Scherr:
“Our direct operating expenses remained controlled in the quarter as they grew with transaction volume. On a unit basis, we achieved productivity gains across most categories of auto. The exception remained vehicle damage costs, particularly those on our EVs.”
Tesla's EV price war has devalued used car values across the board; EVs more so of course. CEO Scherr point out that the price cuts are beneficial for future purchases; it ain't all bad.
Scherr said Hertz is still “committed” to buying 100,000 cars from Tesla and 175,000 EVs from GM, but is not on target to have EVs represent a quarter of its fleet by the end of 2024 any more as previously hoped.
Personally, I would not rent an EV; they don't fit my typical purpose for renting. I don't see that changing...
They're both fools. Hertz saw the values of used Teslas soaring, thought they could hold them for a year and sell at a profit. And for Tesla, why would you want your "exclusive" cars being rented out when someone reserves a Corolla or similar or being picked used to pick up passengers by an Uber driver?
Used Teslas have never soared. Tesla sells to Hertz, and everyone else, because they are in the business of selling cars.
My guess is Hertz thought they could lure customers in with EVs and perhaps save a little on maintenance costs. That's what I don't get.
On top of that, Hertz typically gets a fleet discount on their purchases but Tesla does not offer fleet sales. Hertz pays the same as you or me.
When they entered into this agreement, the price of used Teslas was appreciating. I would bet there was a discount given to Hertz.
Of course you are entitled to speculate, but there is no evidence to back that up. The Hertz purchase was big news at the time because Tesla's stock jumped. The fact that Hertz paid full price was big news.
