Continuously reducing prices and high maintenance costs, rental car company Hertz delays purchasing 100000 Tesla vehicles

On Thursday, October 27th, local time, US car rental company Hertz announced that due to higher than expected maintenance costs for electric vehicles and Tesla's continuous price cuts, the company has temporarily suspended its plan to purchase more electric vehicles.It is reported that the continuous price reduction of electric vehicles this year has reduced the resale value of most of Hertz's electric vehicles by about one-third

On Thursday, October 27th, local time, US car rental company Hertz announced that due to higher than expected maintenance costs for electric vehicles and Tesla's continuous price cuts, the company has temporarily suspended its plan to purchase more electric vehicles.

It is reported that the continuous price reduction of electric vehicles this year has reduced the resale value of most of Hertz's electric vehicles by about one-third.

Stephen Scherr, CEO of Hertz, stated in his 2023 third quarter financial report released on Thursday that "our progress towards switching to electric vehicles will be lower than previously expected

In the third quarter ended September 2023, Hertz's profit margin was lower than expected.CherThe cost of repairing electric vehicles is a challenge. Our direct operating expenses for this quarter are generally controllable as they grow with increasing transaction volume. From a per vehicle perspective, most types of vehicles have achieved productivity improvements. The only exception is vehicle damage costs, especially electric vehicles

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After announcing its third quarter results, Hertz's stock price closed Thursday down 10% to $9.04. Tesla's stock price also fell about 3% on the same day, closing at $205.76 per share.

Hertz also revealed on Thursday that the company currently has approximately 50000 electric vehicles, accounting for 11%. About 80% of pure electric vehicles are Tesla, which means Hertz has approximately 35000 Tesla vehicles.

Hertz initially stated that it would order 100000 Tesla electric vehicles from Tesla by the end of 2022. At present, the number of electric vehicles purchased by the company is far lower than the original plan.

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On October 25, 2021, Hertz announced for the first time its plan to expand the scale of its pure electric vehicles, "by the end of 2022, 100000 Tesla vehicles will be purchased." After Hertz announced this plan, Tesla's market value hit $1 trillion for the first time.

At that time, Hertz also released a commercial featuring American Super Bowl star Tom Brady, next to the Tesla Model 3 electric car parked in Hertz's garage.

It wasn't until November 2, 2021, a week after Hertz announced this plan, that Tesla CEO Elon Musk posted a message on social media Twitter informing Tesla shareholders that Hertz had not signed any bulk order contracts with Tesla.

Musk often says that electric vehicles require less maintenance than gasoline vehicles, unlike gasoline vehicles that have oil, oil filters, engine air filters, transmission fluid, spark plugs, and other components that require annual maintenance or regular replacement.

This is a huge selling point for electric vehicles.

But Nikhil Naikal, CEO of Kinetic, which provides repair services for electric vehicles, stated in an interview that electric vehicle owners may also face special maintenance needs.

He said, The reality of electric vehicles is that they may weigh hundreds of kilograms or even more than gasoline vehicles, and travel faster with higher torque. Due to their very fast speed and weight, the inertia brought about by them can affect the suspension system, brakes, and steering column. This is not very intuitive. Although electric vehicles have fewer moving parts, they often require more maintenance. Electric vehicles especially need to be replaced Tires, because high torque and weight can cause them to wear out faster (Chen Chen)