One of the biggest reasons for the lack enthusiasm for used EVs is the ticking financial time bomb that comes with having to replace the battery packs at some point which could mean layout out an additional $10,000, $20,000, or more to replace something an ICE vehicle doesn’t have. Could it be a reason Hertz is having a tough time getting rid of its EV fleet now that they realize no one really wants to rent an EV?
When Hertz first announced it was selling off most of its EVs, it blamed lower demand among the traveling public than it had expected. “They have an oversupply” of Teslas, said John Plimpton Babcock, an analyst at Bank of America who covers the car-rental company. That lower turnover meant less profit, he added.One thing I hadn’t realized until recently is that many EVs drive differently than ICE vehicles, that difference being that some only have on pedal...and it isn’t the brake pedal. It takes a while to get used to that difference and a lot of people renting EVs have problems getting used to the difference. There have even been some customers who returned their rental EVs in favor of an ICE car.
It makes sense Hertz would try to sell off its fleet now. Purchases of brand-new EVs are stalling out after a decade or so of stratospheric growth. Auto loans have interest rates starting at about 5 percent and go skyward from there. A shortage of reliable charging stations, and worries about batteries losing power in cold weather, have all hurt public interest in owning — and perhaps even renting — an EV.
To get back to the downside to used EVs, this one example from the same linked article illustrates it quite well:
At the start of the year, after Hertz announced it was selling off its fleet of Teslas — backtracking on a plan to buy up 100,000 of the electric vehicles — the news sounded good for Bijay Pandey, a 34-year-old self-employed data worker in Irving, Texas. “I have another vehicle, and I was trying to add one for my wife because gas prices were too high,” he said. When he found out that it came with a $4,000 tax credit — even better. “That’s what attracted me,” he added. So, the day after Valentine’s Day, he bought a red 2022 Long Range Model 3 with 70,000 miles on it. It ended up costing just about $25,000, not a bad deal for a car that can sell for about $47,000 new.I don’t know about you, but I know I wouldn’t want to be driving a rolling incendiary bomb that no fire department would be able to extinguish, or worse, burns down the house when it ignites while it’s in the garage.
But almost immediately, there were problems. After getting a temporary title, he found the car wasn’t reading voltage correctly. Soon, a body shop found a quarter-size hole in the undercarriage he hadn’t seen before, which led to revelations of deeper issues inside. “The high-voltage battery pack is damaged and could cause extreme safety concerns,” a Tesla technician texted him. Because the hole was “exterior damage,” it wasn’t covered by the warranty, which meant a $13,078.58 repair bill. Hertz said that it would swap the car for Pandey, but for about two months he waited — making $500 payments on his auto loan — before getting a replacement. “I realized why they were trying to get rid of those Teslas,” he said. “If anything happens to a Tesla, then the bill is too high.”