Sixt to Phase Out Teslas From Rental Car Fleet on Poor Resale Value
- Thread starter PandaBear
- Start date
EVs could be a real money-maker for the rental car companies if they would have invested more money into it. If they would have marketed it properly, people would rent them.
We recommend our EV Tesla fleet for those that plan to drive less than 250 miles. Don't worry about recharging. Bring it back and we'll handle the recharging.
I'd rent an EV if I didn't have to worry about recharging it. Making it inconvenient for the renters is not a way to maximize rental profits.
We recommend our EV Tesla fleet for those that plan to drive less than 250 miles. Don't worry about recharging. Bring it back and we'll handle the recharging.
I'd rent an EV if I didn't have to worry about recharging it. Making it inconvenient for the renters is not a way to maximize rental profits.
2 things wrong, IMO,with renting a Tesla.
1 - charging issues if you are gonna drive any real distance
2 - the tablet display, lack of knobs, voice controls, 1 pedal driving, etc are all a learning curve. Add that to driving in an unfamiliar area can be a recipe for frustration.
1 - charging issues if you are gonna drive any real distance
2 - the tablet display, lack of knobs, voice controls, 1 pedal driving, etc are all a learning curve. Add that to driving in an unfamiliar area can be a recipe for frustration.
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How would you suggest marketing a rental EV?
I'm quite curious what an advertisement would look like?
Also what demographic of the population would benefit from a rental EV (considering they are paying by the day for having it in their possession, so getting the most use out of it is of paramount importance)?
JHZR2
Staff member
Tax subsidies aside, I’d consider buying an EV if resale is poor. It’s a disposable item as opposed to an ice.
Resell value is usually a reflection of depreciation for a very good reason. People don't buy something used if they don't hold up.
Luxury cars that are not reliable? Badly depreciated
Not so fuel efficient economy car? Badly depreciated when they are really old (V6 Camry, V8 wagons, etc)
EV with battery aging problem like Nissan Leaf? Badly depreciated
Tesla is an odd case, they were overpriced and then discounted later. The car is not worn out but something like this is what they should have a clause to lease and a right to buy at a predetermined price instead. Looks like their accountants didn't do their jobs.
Prius didn't deprecate as the initial assumption because Toyota overbuild it, and now people trust its reputation.
Our 2018 Mid Range is obviously an early build. While the car has 17K and is perfect, depreciation will be high. The cars were continually improved. I doubt I will trade it in, but who knows?
I don’t think one bit of it was head in sand. Private owners and businesses like Hertz and Sixt saw all that free money on the front end, and figured it was a great way to pocket extra overall profit. But there is not a single car that can be considered an investment on the 0-10 year time range; especially one that will likely need a $10k+ “repair” every decade or so.
Some customers have their head in the sand, sure… but the market as a whole does not share in their insanity. The truth, as they say, always comes out in the wash.
Sounds like they just lost too much money on the back end due to the pricing drops. I don't think it would have mattered how successful they were as rental. They were going to lose it on the back end. I really think with the way Tesla pricing is that it makes it a good proposition for the average buyer that treats a car like a piece of tech. Buy it new, drive it until it doesn't drive anymore, and get another. Hard to realize a loss if you get the full useful life out of it. A rental will never do that for the rental company.
Most rental companies have a plan available to bring the vehicle back without a full tank. It’s based on convenience and costs more than just stopping at a gas station on the way back and filling up. That model would fit a renter of a electric vehicle just fine.
Unfortunately, ofher threads I’ve read suggest that the rental companies don’t want to invest in on-site charging equipment or have an employee shuttle cars to super chargers. It’s a half hearted effort in most cases. Also, giving a under-charged car to a customer is a bad decision.
Until they get their act together rental companies with electric vehicles are going to have low profit margins on these things.
Meanwhile I just spoke with a friend who was in Phoenix and had an Uber car show up that was autonomous with no driver. He hopped in and the car took him to his destination. Add that feature to the car rental business.
Unfortunately, ofher threads I’ve read suggest that the rental companies don’t want to invest in on-site charging equipment or have an employee shuttle cars to super chargers. It’s a half hearted effort in most cases. Also, giving a under-charged car to a customer is a bad decision.
Until they get their act together rental companies with electric vehicles are going to have low profit margins on these things.
Meanwhile I just spoke with a friend who was in Phoenix and had an Uber car show up that was autonomous with no driver. He hopped in and the car took him to his destination. Add that feature to the car rental business.
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There's a reason my buddies still in the used car side of car sales won't take them, and that was long before Tesla's aggressive price cuts. The rental companies seem to be learning the hard way. Leasing would have been smarter.
MBAs like to run a business with statistics and spreadsheet. The problem is statistics can be manipulated and people can load up a good deal for you, and then leave you with the bag afterward. Sometimes you win sometimes you lose. A lot of cars leased right before the pandemic has owners able to sell their cars at a much higher price when the lease end, than returning it.
The Leaf purchase owners were left holding the bag when they didn't lease. The lease owners won big time just returning the car and Nissan lost a few k per month selling them afterward. Honda just decided not to sell their Clarity EV, just lease them for 2 years, then when they found out they are still good for another 2, lease them again with insurance covered on the house, a win for the customers.
Sixt / Hertz were rolling the dices, they won sometimes, they lose sometimes. Someone has to take the risk and only the engineers would know how long they would last and probably how low its price would drop.
I don't know how Sixt is doing these days, but I remember when they opened their first location in Las Vegas. It was across the road from the airport rental facility, separate from everyone else. Upper management of Hertz was complaining because they were at least in the US a small company and could react quicker. I get that Hertz is a large company and likely think they had the world by the balls, but that just made them slow to react. I'm sure Sixt's income is much lower, but their ability to react as a small company seemed to be a point of jealousy for Hertz. That said Hertz at least at the time I was there was a very poorly run inefficient company.
You nailed it. In business you take calculated risks, use surveys, spreadsheets and statistics, and hopefully some common sense. Common sense tells me when it comes to rental cars is many people drive them a lot. Sometimes 300 miles a day or more, they don't want to be jerking around with charging, supercharging, plugging in at a hotel at night, that's if the hotel has provisions for it, etc. The other thing is there are many people like myself who don't own an EV and aren't familiar with charging etc. so they don't want the hassle. You would think the big wigs at Hertz would have figured that out, and went with a more conservative approach. Instead of go broke or go home. Money is a great teacher people learn from gains, but they learn even more from loses. Hopefully Hertz learned something.
I think because the industry is evolving they should have them available for those that want them, but I agree going all in was not the answer. I still recall a trip I had as a Hertz employee where I flew into Denver and drove to Vail with close to 1,000lbs of electronic equipment for the at the time new Neverlost navigation systems. We were supposed to have a V8 Tahoe for the trip, but the best they could do for us at the time was a 4.0 V6 Toyota 4Runner. It struggled badly going up the mountain. We couldn't even maintain the speed limit in some stretches. I don't think the Tahoe would have had the same issue. We didn't have EVs at the time so it never came up, but while it would have been plenty of power to maintain speed, I don't know the range would have been sufficient to do what we were doing.
It's hard to tell what they were thinking back then. It could be a great deal from Tesla, like how LAPD got i3 leases. It could be their trashy credit after bankruptcy or before could not let them buy any car at a good deal, it could also be having a lease and let Tesla holding the bag cost too much of a premium and they just take the chance.
Desperate people takes a lot of uncalculated risk and then just pray. If they buy a smaller fleet it would probably be ok. If they lease them they would probably be ok. If they made a choice and sell them sooner they would also probably be ok.
They played bad, it is not always just EV's fault they just weren't managed correctly in the middle or upper management.
Correct that applies for just about every business decision. In this example I was referring only to he Hertz EV screw up. You'd think for what upper management is paid they would have done better homework.
My thoughts are the big 2 (National/Enterprise/Alamo and Hertz/Dollar/Thrifty) under-estimated Sixt when they broke into the US market. I rented from Sixt first when they barely had a token presence in the US and I think at that point they were only in 8-10 major metro areas (this was back in 2012 or 2013), now you can grab them in pretty much most midsize metro airports.
In the beginning it was like renting with National but at Alamo prices, now its like renting with Alamo at Alamo prices. If you want the customer service and a non-clapped out car you better just pony up to rent from National. Don't let the heavily orange glitz and glamour of Sixt fool you - they are just another rental agency geared towards budget conscious tourists. Yes I am cheap and I rent from them regularly because I can deal with an odd smelling and stained Camry for 8-10 hours to save $100.
