Hertz took a risk and came out on the losing end when it decided to invest heavily in Tesla’s electric vehicles a few years back. This move was meant to revolutionize the rental car industry, but instead, Hertz ended up purchasing 30,000 Teslas only to be deterred by issues such as depreciation and costly repairs. Now, the company is looking to offload these vehicles. While initially, these used Teslas seemed like great deals, it turns out that high mileage EVs previously used as rentals can be a nightmare to own as reported by New York Magazine.
Initially, Hertz had grand plans to incorporate 20% of its rental fleet with EVs, starting with a massive Tesla purchase of over 30,000 vehicles. However, unforeseen maintenance expenses led the company to start selling off its fleet. This led to attractive deals on used EVs, especially with the $4,000 used EV tax credit. Buyers flocked to Hertz dealerships to take advantage of these deals, but issues started to surface as they realized the challenges of owning these vehicles.
For example, Bijay Pandey from Irving, Texas, bought a 2022 Model 3 Long Range for his wife at a discounted price, only to encounter problems shortly after the purchase.
Upon inspection, Pandey discovered issues with the car’s voltage reading and an unnoticed hole in the undercarriage. Further investigation revealed damage to the high-voltage battery pack, posing significant safety risks.
The cost to repair the battery pack damage amounted to over $13,000, not covered by warranty. Hertz offered to exchange the car, but the process took two months, during which Pandey continued making payments. This experience shed light on why Hertz was eager to sell off these Teslas – the high maintenance costs associated with them.
Pandey’s ordeal is not unique, as many individuals on platforms like Reddit and Tesla forums have shared similar cautionary tales. Some have advised against buying used Teslas from Hertz due to the wear and tear these rental vehicles endure. It has been suggested that purchasing directly from Tesla may be a safer option.
The wear and tear on these batteries from being rental vehicles is a significant deterrent. Most rental cars undergo minimal abuse, but given the nature of these Teslas being used for services like Uber, including frequent fast charging and extensive use of battery range, buyers may face unexpected issues. The advice is clear – stick to buying directly from Tesla.
While Hertz declined to provide further comments on the situation, it is evident that the company is eager to sell off its remaining Tesla fleet. A spokesperson mentioned that Hertz aims to sell the remaining 20,000 vehicles by the end of the year. If you are considering purchasing one of these vehicles due to their attractive prices, proceed with caution.
Update: Although Hertz expressed dissatisfaction with the article’s portrayal, they did provide a statement. Hertz CEO Gil West confirmed the company’s progress in downsizing its Tesla fleet.
“Regarding EVs, we previously announced our plan to reduce the EV fleet by 20,000 units. By the end of Q1, we had sold approximately half of them. With this progress, we have increased the EV disposal plan by an additional 10,000 units, totaling a reduction of 30,000 vehicles, which we anticipate completing by year-end.”
West also assured that Hertz is committed to addressing any customer concerns related to their vehicles.
“We strive to offer all our customers an exceptional experience. If a customer encounters any issues with a vehicle purchase, we make every effort to resolve it. In this instance, upon the customer raising concerns, we worked closely with them to provide a Tesla that met their requirements and preferences.”
Hertz also emphasized that each Tesla comes with a 12-month/12,000-mile limited powertrain warranty, undergoes a 115-point “pre-delivery inspection,” and includes a seven-day buy-back guarantee.
