Electric cars are actually a very good fit for many rentals. Thinking through my last 5 rentals.
A wedding that was 1 hour from an airport, ~100 miles RT.
A ski trip where I wanted to drive from Denver to my AirBnB near Winter Park Colorado, ~200 miles RT.
A hiking trip where I needed a second car for a point-to-point car shuttle (New Hampshire!), ~120 miles RT.
A bachelor party where I needed to drive from the airport to a trailhead then to an AirBnB then back to airport, ~150 miles RT.
A national park trip to the Grand Canyon, ~500 miles RT.
Each of those scenarios would have been 1 full charge of a Tesla round-trip, with the exception of the Grand Canyon. Maybe not the ski trip since it's mountainous and cold weather kills the battery so 200 miles might be a stretch, but I could have trickle-charged at my AirBnB. So basically I can see how many quick rental car needs are met by EVs, plus no dealing with filling with gas!
Right, because bringing it back empty means the car is out of commission for ~12h.
The last three times I've rented a car it's been turned and burned and I've had to wait a few minutes for a clean/wash to be complete from the last renter.
Not to mention that if the charger is on-premise, there is no longer a personnel need to drive gas-depleted cars to an offsite refueling station. That may add up to significant labor savings.
This varies. Laws on safely storing fuel frequently mean Hertz doesn't want to take on the risk (a small leak tends to cost millions in fines). Instead they'll pay staff to drive cars to a nearby station, where they'll have a discount.
Above-ground storage tanks for gasoline are quite safe and reliable. The laws aren't that tough, and most of the compliance requirements are satisfied by having double walled tanks. I struggled to find an instance of fines above $50k that didn't also involve gross negligence.
I know it sounds scary, but most of the fire stations, hospitals, business parks, and schools you drive past will have a few hundred gallons of diesel or LNG stored on site for backup generators. Your city or county public works, taxi yards, and larger post offices will have on site fueling. Large construction sites will usually have on site fuel, or a truck that comes every day or two.
The smaller locations you are using are retail fronts, not depots. When you return the car it is taken to an offsite location anyway to get washed, vacuumed, inspected, fueled, and returned.
They aren't charging you for labor, they are charging you just because they can. In most cases where fuel is not returned full, it's probably a business trip where the renter's company is paying and the renter therefore does not take a shit about it.
Electric cars are also a good fit for rental companies for another reason: Their customers want to make a good first impression on customers, new friends and other individuals they rarely see.
No, people don't usually judge each other on rental cars. But they will judge a contractor for his national origin or skin color, so driving an expensive car offsets that
I would not associate myself with people who are concerned with the make and model of a rental vehicle. Or any vehicle for that matter. It is snobbish nonsense that should be shunned.
Can anyone with an EV speak to the difference in insurance for these vehicles? That is, if I rented a Tesla, would my regular insurance cover me sufficiently, or would I be a fool not to buy the rental company's insurance addon? I'm sure they'll charge a pretty penny for this, and scare plenty of folks into buying it. What would be good reasons to do so?
This is impossible to answer without the details of your car insurance. It entirely depends on what your insurer’s rental car policies are.
There are two issues at hand: accident liability and damage/theft.
For liability, it’s typical that states require rental companies to purchase stare minimum or sometimes a higher liability level than the state minimum as a base.
For damage/collision, there’s no requirement for anyone to hold coverage, so that’s on you. Many travel credit cards offer damage/collision insurance as a feature, and some individual car insurance plans extend coverage from your personal car insurance to rented cars, but don’t assume this.
You can generally rent a car if you don’t own a car and don’t own your own car insurance, and in most states you wouldn’t be obligated to purchase additional coverage from the car insurer.
A Tesla is no different than any other expensive car rental, the fact that it’s electric is irrelevant. It’s no different than renting an Audi Q7 from a rental car company.
They'll wise up to it when people start requesting it.
I'll even pay a premium for a 100% guaranteed reserved charging spot at a hotel. This way I can just gun it and arrive at 1% charge, plug in, sleep, have breakfast and be on my way with a full battery again.
Small hotel owner here. There is no grid capacity near our airport, we actually have a restriction of 15kW limit / building in the area, and we ended up powering each floor from a different building (my family owns the neighbouring houses).
We had gov't grants available to build charging stations, and couldn't get them because of the power grid situation.
That's a singularly shitty power grid right there :)
Charging overnight even at 2-3kW is plenty for most people, that's usually enough to get you a good 100-200km away from the hotel and to a fast charger (or your next destination).
I just use Tesla's destination charger map and that usually works. And in many cases, at least in colder parts of the country the hotel might have access to engine block heater outlets. These are good enough to trickle charge overnight and save some time in the morning.
Unfortunately I've that you can't rely on the chargers being available at most hotels. In my experience they're frequently either ICE-ed (the charging spot is taken by a non-EV car), or there's already another car charging.
There is one problem coming: people fighting over chargers. I was in a Target parking lot with two people fighting over who got to the charger first. Fortunately the mall 5 miles away has a Tesla outlet and a dozen underground charging slots.
In the US, people constantly pull out a gun at fast food outlets because they've got the wrong type of cheese on their waffle, or because burger king don't take discover, or some nonsense.
I don't think you understand the word "constantly". You make it sound like the US fast food scene is a warzone over a single article that is newsworthy because it isn't _that_ common.
On long trips, there may be one or more Hertz locations near your route. If all of them stock electric cars, Hertz could offer a premium offering where you change cars along the way...
Other than the loading/unloading of stuff, the rest of these can be handled with some code. Consider the tech stack of the average Tesla, including how they're always connected to the internet already. Tie the settings to your key in the cloud, and then create a UI to move key 123 from car 456 to car 789.
If Hertz offers up their locations as supercharger locations... that's a LOT of locations to add to the supercharger network with a willing partner to help finance it and maintain it.
Kind of like how the dealer networks, which SHOULD be a massive advantage for Ford/GM to place chargers (and shadow market cars) and build out a huge charging network... well, that's not happening because dealers hate EVs.
I was very pessimistic about Tesla and confused by their stock price.
But I now believe that they indeed are doing it and that we’re finally at the EV revolution.
I’m not an early adopter type and the Teslas don’t excite me at all, but I’m really delighted that the market is evolving. I’m delighted that I was wrong.
Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company. They are also a car manufacturing supply chain, having brought much of their component production in house. They are also an energy company, both generation and storage, but also distribution, like gas stations. Think Exxon, BP, Chevron, ARCO, etc.
They are probably a few other things, but this is the mystery of their valuation.
For the record, their market cap is also greater than "Australia's Woodside Petroleum, Chevron, Exxon Mobil, Imperial Oil, Royal Dutch Shell, Shell Energy North America, Canadian Natural Resources, ConocoPhillips and French group Total [combined]" [1], so they're also valued kind of crazy compared to energy companies...and that was in January 2021 before the most recent spike. Sure, part of that is faith in renewables. But in any fair comparison their stock price is still a little confusing.
I might be a bit crazy, but you just mentioned a slate of companies that absolutely have no future at their current scale. Sure this won't happen overnight...
But my theory with petroleum is that it has so many HUGE economies of scale built into its production that a demand collapse will send it into a rapid tailspin.
A small version of this happened in the Dakotas when the Saudis started dumping oil to get it under a price, and the North Dakota oil industry collapsed. That was due to intentional oversupply, not necessarily due to collapsed demand.
But so much of the oil market is now pretty expensive extraction: tar sands, shale oil, fracking, deep offshore. The easy stuff is gone. That to me means that the industry rests on a certain price, and if it falls under that, the industry can't sustain it.
I think the big thing in this reverse economies of scale, where costs rise as the industry shrinks (and absorbs writeoffs) is that finance, already somewhat intimidated by the growing pressure to divest from fossil fuels, will rapidly abandon it once it becomes extremely risky due to collapsing demand and massive migrations of transportation modes to electric.
It's all vague decade-away prognostication, but you'll start hearing the violins playing for oil companies when some combination of this happens:
- charging infrastructure builds out (2 years to catch the current Tesla supercharger, probably another 5 years to get some semblance of every-50-miles availability)
- LFP chemistry hits a power density of somewhere around 200-250wh/kg (LFP is really cheap and has far less materials restrictions from cobalt) (probably in 1-2 years for mass production)
- various solid state technologies hit production (looks unlikely for 5 years)
- EV drivetrain cost (battery, motors, cooling, case, management systems, etc) drops to 2/3 of ICE (probably another 4 years)
- a carbon tax, a more substantial EV subsidy
The floor will rapidly fall.
I'm not saying Tesla isn't insanely valued. But the grim reaper is coming for all those oil companies.
We are so dependent on fossil fuels that I'm slightly more sceptical. Over 90% of global energy is created with fossil fuels. We often get fooled about the electricity sector which is something like 1/3 renewables. But electricity is only 30% of fossil fuel consumption. Even if the share of electricity increases to 40% because of ev's and we produce 80% with renewables, we still have ~70% that requires fossil fuel production. That 70% is not that easy to replace -- we are talking about manufacturing, logistics, agriculture, mining, etc. Getting rid of coal only increases oil and gas demand.
I'm not sure what is the percentage of consumer sales for any if those companies mentioned, but I suspect that even if it was 0 it would not drastically affect anything but profits. Oil will be less profitable -- yes, but it will be widely used as long as energy required to mine it is less than what is produced. It is unfortunate, but these companies are on a very good long term business (hard to say really because I don't know what are the global untapped oil reserves).
Manufacturing components to produce renewables require a lot of fossil fuels as well. We are not yet at the point where we can create new renewables without using fossil fuels.
I'm not saying the floor will not fall, but I'm afraid that if the floor falls we are in quite big trouble, and it is not because if the EV market.
That 90% is much easier to replace than you think because its mostly wasted as heat and inefficiency.
Once you factor in the fossil fuels used to extract fossil fuels it all topples pretty quickly.
The main source of trouble will be people ignoring the issue until it becomes urgent and not planning a smooth transition, global procrastination rather than the actual task itself.
I like your optimism. I just don't see how we can produce and transport food, electronics, and specifically windturbines, solar panels and batteries on a global scale without using massive amounts of fossil fuels.
Actually, I would love to see a the real "energy footprint" of a solar panel. Like, how much mining, transporting, manufacturing and installing the panels consumed energy, and how many days it takes for a panel to produce more energy than the entire operation used. If anyone has such a breakdown I would be really happy to see it. If the numbers are good, maybe the future is still bright.
You can find these online, they've been doing them for years. Though maybe note that "energy" isn't really the problem, it's the greenhouse gasses that have sparked this changeover. "Carbon payback time" is a common phrase. It's now getting into the "this is both cheaper and better regardless of carbon" phase, but it wouldn't have been pushed this hard if the numbers didn't stack up in theory.
Zooming out to a global level, geopolitics becomes important to consider as well. As soon as renewables are able to change the power dynamics between eg Russia and Ukraine (Ukraine is dependant on Russia for oil for heating in the winter) things get very interesting indeed. We are still decades away from that imo.
Its surely just that easy... for a small and relatively powerless nation to product nuclear power under the watchful eye of a very powerful nation that doesn't want it.
Ukraine already has 15 reactors generating about half of its electricity. (Including one famous one).
Ukraine receives most of its nuclear services and nuclear fuel from Russia, but is reducing this dependence by buying fuel from Westinghouse in the USA.
Just do more of this. I doubt Russia will attack a US concession that's building a nuclear plant.
Oh yes! We won't care about the middle east, so none of that bizarre cowtowing to the Saudi king that the US Presidents always do (I think largely to get on the post-term massive slush money that flows from the Saudis to former presidents, which I have no direct knowledge up, but seems obvious)
The Navy will lose a huge reason for its existence: securing the seas for supertankers. There are so many countries we won't care about anymore. Iran. Iraq. Venezuela. Nigeria. Really, by extension, Israel, Egypt, Jordan, etc. Then again they'll just keep building up the China boogeyman to keep their money, regardless of its validity.
As you pointed out, Russia will face an existential crisis, I think oil revenue basically keeps Putin afloat. A total collapse of Russia is pretty risky due to the nukes, but we'll see.
I think you are too optimistic about Israel. These other countries can be dropped easily but Israel is a huge liability that I don't know how the US will get rid of. I do feel confident that the winds are starting to fly against them slowly but I don't have my hopes up. It will likely be a generational shift that finally does them in but IDK. What do you think?
If the US drops Israel someone else will pick them up (like Russia or China or India). The country is developed, produces tons of IP, and is armed to the teeth (and has nuclear weapons).
But this is lala-land thinking. As long as the United States remains on the UN Security Council (which is equivalent to saying as long as the UN continues to exist in any practical form), both Taiwan and Israel will remain our client states.
Israel is not a US client. The directive influence is the opposite of the direction that it would be were that the case, and the reason for that is exactly the thinking you articulate: “If the US drops Israel someone else will pick them up”.
If the US drops Israel, it paves the way for economic sanctions against the country for their dealings of Palestinians. This is why they got really triggered over BDS. They cannot be swayed militarily or via protest but economic is a whole different ballgame.
A lot of European/Asian countries would like to distance themselves from Israel but cannot due to US influence. Furthermore losing the US support loosens their investments into the country and siding with China or Russia would cut a lot of economic ties to the US for sure.
>But this is lala-land thinking. As long as the United States remains on the UN Security Council (which is equivalent to saying as long as the UN continues to exist in any practical form), both Taiwan and Israel will remain our client states.
Thats my point, if US leadership decides that Israel is no longer worth the liability, then that entails allowing the UN and its member states to start putting real pressure on Israel. Again, you might think this is lala-land but we are seeing small changes starting to happen as the internet has helped to expose Israel and act as a counterbalance to mainstream talking points.
With Millennials and Gen-Z starting to come into power we are seeing even more pushback. I don't realistically see meaningful reform until Boomers are pushed out. While all this is happening in the West, Israel has made a turn towards hard right wing and I feel this will be a strategic error long term as the pendulum is swinging back to hard left in the western countries.
The incredible thing is a calcified Russian system with access to way too many nukes collapsed within our lifetimes and the West adequately prevented nuclear disaster. We ended up with the current farce of a government as a byproduct, unfortunately.
Yeah I'm not a domain expert on decarbonization or anything, but from what I've seen on the industrial manufacturing side of things in the US, electricity prices would have to be consistently very low for the cost of re-outfitting existing natural gas heating systems with electrical ones to make sense without fairly punitive carbon taxes, and even if you pass carbon taxes in first world countries to make it "worth it" to retrofit with electric heating, most of the domestic manufacturing will just go belly up without tariffs--good luck getting developing economies to enforce the environmental standards most of us would like to see on their own, and good luck getting the ruling body politik to think tariffs are a good idea. I ran the number on our facility and moving from natural gas boiler heating to electric would have been iirc something like 8-12x more expensive, even before buying the very expensive heaters, and I'm fairly certain that for higher temp operation(our steam system was low pressure) it would be even more expensive.
There are a couple other stand out problems I see with getting the industrial/manufacturing sector off fossil fuels. First, I don't think that we have the grid infrastructure to replace natural gas with electrification at the same time we do cars[1][2]. From what I understand its something of a problem already for electric car charging, and industrial use of gas for heat (and saying nothing of trying to replace the petrochemical industry, interesting read on all-electric ammonia production [4]) is pretty staggering as well; electric transmission is some substantial multiple less efficient then direct heating with Gas. I think this is kind of the opposite of electric cars which tend to be more efficient than ICE, but again I'm not an expert and am not at all sure that is true of cars, just my impression which seems reasonable intuitively, as turning fuel directly into heat has essentially 100% efficiency while turning fuel into motion can only be some fraction.
Second, super cheap electricity is extremely fungible, so it becomes a prime candidate for Jevon's Paradox[3]. I feel that there would have to be some "unfair" power rates for heating for electricity to supplant natural gas unless we implemented massive carbon taxes, in which case return to my first point about off-shoring.
I can see how it would theoretically make sense to put industry right next to large power generation sources, like dams, solar array/ battery installations, or nuclear power plants(lol), but a lot of these operations aren't exactly trivial to move, and our current climate of Environmental regulation makes moving these sorts of things that much more difficult. Also manufacturing requires a not insignificant amount of logistics/shipping so transplanting them to power generation sites has its own set of drawbacks.
All in all, I try to be a techno-optimist, but seriously worry that humanity's ad-hoc system of organization (that's rife with corruption) will be our downfall in this global climate crisis we've created. So far I can't see a way out of this without a breakthrough in power generation and a breakthrough in carbon capture or some other unforseen-by-me break through. Really I just don't see our current tech stack as being capable of getting us out of this mess. So here's hoping that high-temp super conductors bare fusion fruit, and this gallium catalyzed CO2 splitting is the real deal.
[3]https://en.wikipedia.org/wiki/Jevons_paradox (fun fact, I've used duckduckgo for many years now, and this required the rare !g to find without knowing what the paradox was called off the top of my head. my query was: "the cheaper something gets the more it is used", top hit on big G, nowhere to be seen in the DDG results)
Air source heat pumps are more efficient than gas boilers so total energy usage would decrease [1]. Running costs are also lower, but installations cost are currently higher.
You would need to generate more electricity, although this could be mitigated through improved insulation and smart control of heating systems (for example turning off the heating for 30 minutes during spikes in usage, assuming the temperature is above a certain level).
I'm not particularly thinking of domestic heat production, I agree that heat pumps (ground source, or a pool if you have it, works even better!) are the future of domestic HVAC. I'm thinking about heating for industrial processes, turning off the factory for 30+ minutes during a useage spike is a minor catastrophe if unplanned, you'd either have to design your shift around it (we had time-of-use power pricing and did this) or just close down.
I won't rule out heat pumps as being part of the solution out of hand, but from your source:
>Lower output temperature than conventional boilers – you may need to update your insulation and invest in bigger radiators too
is a pretty big problem when you are trying to heat industrial quantities of things up to industrial process temps at industrial rates.
- People realize what a game changer it is to charge your car overnight and start every day with a full tank of "gas". It's a tiny detail, but a car that can only go 100 miles before needing to refill the gas tank is annoying. A car that starts every day with a 100 miles of range is terribly (for the oil companies) convenient.
That one is complicated a bit by housing situation - but if, if, cities and freeholders get serious about ensuring every possible parking spot (including unmarked ones) has a convenient electrical outlet nearby, that would be a game changer.
In a sense, this would be much cheaper and more convenient than supercharger stations - but what it trades in infrastructure saving, it costs in getting myriad of land owners and councils to make it happen.
You're totally right but again thinking globally, different cultures handle housing in a manner that supports that. I'm thinking of Japan, where they rebuild houses every few years because they're old. Which results in most houses having electric car plugs in them. I have no such hope for my SF condo that I'm writing you from. Maybe I can run an extension cord out of my window to my car parked on the street?
> I'm thinking of Japan, where they rebuild houses every few years because they're old.
This is myth. 35yr loan is pretty basic, most loan supports up to 50yr. We can see many houses built 35yr ago. Anyway, installing EV charger is easy task for own house. It just takes about from $200 if 200V line is available. I believe mostly available unless the house is very old.
More importantly, there are many condos and parking that's hard to install charger due to it need to be approved in condo committee.
I don't worry about a lot of the NIMBY with self-charging. It'll be like bike lanes, once people discover they increase property values, or at least keep them from sinking, it will be a done deal.
>But my theory with petroleum is that it has so many HUGE economies of scale built into its production that a demand collapse will send it into a rapid tailspin.
THIS! Thank you for bringing this up. Few people talk about this coming death spiral. This is really going to mess up a lot of countries incomes and may have severe worldwide political ramifications. In your opinion when do you think it will trigger? It feels like when it does actually happen, its going to happen quickly. From my vantage point in the US it still seems like the majority are not realizing what is coming. Hell Companies like Ford are still introducing new vehicle platforms in ICE configuration only (Ford Bronco for example) and people are buying them up without any consideration as to the future so I suspect it won't happen this decade.
I don't know enough about the economics of the fossil fuels supply chain to make a reasonable calculation.
In terms of your other calculations your targets seems very reasonable. Its amazing at how Tesla is iterating so fast on things like Battery and Motor design. Its super sexy to see the new stuff they keep pumping out(even if the founder seems like a jerk)
Anyone intentionally investing in fossil fuels today is delusional. These companies should have died years ago, but they've managed to delay the inevitable by lobbying to delay action and protect their massive subsidies.
Tesla has shown electric cars can be superior to gas cars in all but one metric (road trips) and they're closing in on that. Wind and solar are now cheaper than coal and in some markets cheaper than natural gas. At peak times electricity from renewables is so cheap its creating a gold rush to develop low cost energy storage to soak up all the dirt cheap electricity that's being produced.
Theres also companies who can produce synthetic liquid fuels with co2 from direct air capture using renewable energy. With a decent carbon tax they could compete directly with fossil fuel companies but eventually renewable energy should be cheap enough that they won't even need a carbon tax.
Fossil fuel companies are as good as dead. They just dont know it yet.
I think that’s definitely true for some of these, and I wouldn’t be as surprised by TSLA having a higher market cap then all of these companies. It’s the combined bit that’s weird. I think ExxonMobil would position itself more as an “energy company” than an “oil company” for instance, and I doubt it will just roll over and die.
I'd agree, but what's the oil company play for relevance? I believe algal biofuels are a failure. Even plastics are under assault, so they can't retreat to materials. Nukes are too far from their backyard. All their carbon capture is pump-into-the-ground and pray/lie to the regulators.
Honestly though, I think this is what they have going for themselves:
- a large amount of smart, if unprincipled, engineers.
- a huge apparatus for government lobbying
- maybe a lot of capital, or at least some window to invest in switchover?
- generator knowhow (turbines, etc)
- global logistics systems
The government lobbying is the key. If there is one industry that could get LFTR/NextGenNuclear off the ground it would be the oil/gas people. The legacy nuclear industry has no ability or desire to produce a nuclear power gen solution that is competitive not only with current day alt energy, but the alt energy that will be in ten years.
I'm the guy that tells every pro-nuclear post on HN that its infeasible to chase whatever gee-whiz design is being discussed because of the ten year lead time and that storage/wind/solar are still on nonlinear cost improvement curves.
But the oil/gas industry DOES have the political juice to chase that at the multiple levels of federal/state/local/military/civilian that it would require to get a cost-effective small-scale nuclear reactor solution like a LFTR/MSR.
But that really is a pipe dream. That would require foresight from the executives, and executives in fading industries almost always just ride the companies into irrelevance, and most importantly for the executives, retirement/pension, and of course huge out-the-door "retention bonuses" in the dying days.
Turbines, nuclear, fusion, renewables is the play for relevance. That and squeeze every last drop out of the last century of fossil fuels. Many won't survive, but some of them will pivot in time/have enough burn to pivot later than they should have.
With many developed countries passing laws to ban the sales of petrol and diesel passenger cars by 2030 or 2035, do all the companies you mention actually have a strong future of growth?
Do you want to buy stocks in companies that have a strong future of growth, or who have always made a lot of money doing one thing, and expect to keep making money doing that same old thing, even though it's clearly not going to last.
While they're not going to die overnight, I suspect they're not going to be worth all that much by 2050, and ~nothing by 2075.
But it means their cost of capital can be lower - for example, by issuing new shares to capture some of that high market cap. Then they can expand much easier than a competitor who cannot get such good rates for new share issuance.
Example: the australian PM who repealed their carbon tax, is now working with his coal baron buddy on a green hydrogen plant. He's now calling for a ... brace for the irony ... carbon tax to help his new business.
edit: correcting myself, getting two PMs mixed up, Turnbull scrapped new Carbon Tax plans while PM, under pressure from Abbot (who he replaced as PM), who in turn had scrapped an existing carbon tax. Still demonstrates the slow shift of the well-connected politicians to follow the money.
One way to explain this is that “goodwill” is an intangible that shows up on the balance sheet, which must always be balanced. Assets = Liabilities + equity.
Goodwill is on the asset side of the equation.
Basically, Tesla stock owners consider the company to have ambiguous secret sauce of the right employees, IP, brand recognition/reputation that makes it more valuable than its current on-paper business activity.
Or, it’s just a stock that they believe they can find buyers for – a belief which has been proven to so far be true.
Not really. The modern tech companies, FAANG, and many doing SaaS, etc. consume highly expensive labor and consume it while not linear, yet still in some significant correlation to the revenue, thus one can see that they have kind of significant marginal costs. While Tesla's marginal costs will more and more will be dominated by the R&D.
Well people can short Tesla. I heard this under evaluation among solo traders. But Tesla is having a lot of money in crypto afaik. So it often may seem, their profit in cryptos increases their total val.
Maybe what you're saying is true regarding the company itself, but it's a meme stock. You go down and talk to people, people will say that yet wouldn't actually invest in the basket of companies of those industries.
It's not a problem for Tesla or Elon per-se, but we shouldn't assign intelligence to people basically voting for their favs with their wallets.
Shouldn't also blame these people, because the stock market is as much prescriptive as it's predictive: if enough people "vote for their favs with their wallets", those favs may actually start (or keep) doing OK because of that, if they're not completely incompetent.
(Myself, if I had some funds that are not already earmarked for something more important, I'd dump some into TSLA just as an expression of support to Musk and electrification of transport. I'm sure many people did just that, with no expectations of return.)
People are generally shifting toward green investments in their long term portfolios in my little sphere of the world, but Tesla typically isn’t one of them because it’s considered too risky.
That risk is what made a lot of people rich of course, but investments in green energy companies in Denmark have seen a 15-35% increase in value, year by year, over the past decades without any real risk. It’s been safer than index funds here.
All energy companies have really, but you feel better when they are green.
Tesla may yet revolutionise batteries the same way the personal computer or the smartphone became something we all have, and thus be the best investment you could make right now, but it also might not.
The energy companies on the other hand aren’t going to stop selling a steady flow of energy to people. Why we let investors benefit from utilities is another discussion, but as long as we do, it’s going to be some of the safest investments you can get into.
Isn't Tesla one of the least capital efficient ways to invest in transport electrification? How much of that will end up in genuine R&D and furtherance of your aims, as against paying for transient meme interest and massive risk loading?
They literally developed a completely new battery manufacturing factory and cathode plant from the ground up. Plus of course their own batteries with their own chemistries. No other car company comes even close to that.
They are vertically integrating to the point where they themselves are building their own battery manufacturing equipment.
They are even slowly getting into mining themselves. And of course solar, stationary storage and so on.
Hard to see what company is doing considerable more. Tesla is doing a pretty large amount of innovation.
I don't know where your figures come from. I've seen Tesla's 2020 FY R&D expense was $1.5Bn, but that is dwarfed by the other players if the linked data is correct[1].
So apart from paying a massive premium, dollar for investment dollar you'd get much more R&D for your money buying a basket of non-Tesla automakers than tesla.
Every car manufacturer is a supply chain and and owns their own component production. Ford owns Motorcraft. General Motors owns AC Delco.
Tesla doesn't have nearly the size of the distribution network of any of the oil companies.
The fact is Tesla was trading at 1000x historic earnings, and 161x future earnings, or to put it another way, 10x any other car manufacturer, and this this was before this deal. [0]
As long as Tesla can grow at or around 50% a year all those numbers you are using are useless. They will be halved every year from the current level.
Yeah right now its seems crazy, and it is a unbelievably high valuation. But its more a sign of things to come.
The other OEMs are laden with debt, which Tesla doesn't have so any comparison there would be at the EV level which doesn't make Tesla look that out of line considering it is about to overtake in 3-4 years most of the companies it is compared with. Also that debt the other OEMs have, was used to build ICE factories and technologies which are quickly becoming outdated.
If and its a rather big IF I'll grant you that Tesla manages to achieve what they aim for which is 20 million cars in 2030, thats effectively 1/5 market share globally. Add into that the energy storage, charging network, solar roof tiles, AI and FSD.
However any signs of growth weakness or interest rate changes will wreak havoc for sure.
Even if Tesla falters, the other LICE OEMs are destined to fail, maybe 1-2 survives (GM/VW), the cat is out of the bag and what looked like a totally entrenched industry has been blown wide open by Tesla, and loads of other startups are following through.
Tesla needs to execute, and I’m not sure that’s their strong suit. Sure they identified that it was finally time for the electric car, and made an electric car that wasn’t ugly as sin (gdiaf CitiCar and EV-1), but theiyre plagued with manufacturing delays and poor workmanship. The other manufacturers simply are better at putting quality cars out the door.
Sure they were late to the game, and but it’s not a foregone conclusion that Tesla (or any startup) is going to dominate this market.
As for AI and FSD, I’ll put my flag in the sand. We will not have production fully autonomous self driving cars (ie cars without controls) on uncontrolled surface streets in 20 years. From what I understand, the technology has hit a plateau, and there’s just way too many edge cases. If this wasn’t the case, you wouldn’t have people like Andrew Ng going around telling people to redesign cities to make it easier for robot drivers.
If it does happen, it’s not going to be Tesla. I don’t think they’re the technology leader here. Last time I read something, Cruise and Waymo were leading, and Elon’s insistence on not having lidars was holding Tesla back.
Well, the fog of 'war' is thick right now. I've chosen to place my capital and belief with Karpathy and Elon. Tesla seems like to best multivariate bet and it's priced like a winner in that respect.
With regards to execution, I don't think anyone has done a better job of scaling physical production faster than Tesla? And you don't have to like Elon but he sure does know a thing or two about this.
I've heard both the quality argument and the Tesla killer argument for so long that I no longer believe it to be true. If they could, they already would - I would suggest that you drive a Tesla for a couple of days, then go back to ICE. All the revving of the engine and performance hooplas seems so last century after that. A comparison kills the ICE alternative (except for long ranges atm).
The consumer will if given a choice (Tesla supply is restriced) choose the best offering at the lowest price and everything is lined up for Tesla to be just that.
The big joker from my perspective is what the EU / US / Japan / Korea will do to ensure strategic production capacity / industrial strength capacity, enormous subsidies are definitely on the table.
China is all in on electric so they have nothing to lose.
> With regards to execution, I don't think anyone has done a better job of scaling physical production faster than Tesla? And you don't have to like Elon but he sure does know a thing or two about this.
Does he though? Elon's hand can be traced directly to production and safety issues. Lest we forget his hubris in trying to do final assembly with robots, a task that was tried and dismissed by multiple "legacy" manufacturers, and directly resulted in defects and manufacturing slow downs. He's not even technically a founder of Tesla. He partially financed the A round, and then started telling everyone he founded the company. Even SpaceX widely seen as Gwynne Shotwell's baby. I will say that he he's enough money and a fan base to make a bunch of meme stocks. That's something.
As far as driving a Tesla, I have. I test drove a Model S several years ago. I thought the regenerative braking was weird, but something I would have to get used to. I liked the exterior of the Model S, but I did not like the interior. I thought it was ugly and empty (a personal preference), and the infotainment system a cruel joke that not only lacked features common on cheaper cars (CarPlay), but was filled with knockoffs (Slacker instead of Spotify or Pandora, and Google Maps without Google turn-by-turn in particular) and pointless gimmicks (Paint). Even with their v10 update that brought Spotify to the US (finally a win), also brought a bunch of video streaming services that only work when the car is in park. (Why bother? Just use your phone.)
I think you should compare a Model S to a Porsche Taycan. They're comparably priced plugin electrics, but the Porsche is well... a Porsche, a finely made automobile with attention to detail. A Model S is slapdashed together; but you're right, Tesla buyers don't seem to care. Also, for some reason Tesla owners purchase their cars instead of leasing them, the only electric car owners to do so. I can't explain either of these facts.
I also question the quality and flexibility of the supply chain Tesla has. During the start of COVID, Tesla GM and Ford said they'll manufacturer ventilators. 2 out of 3 reconfigured their assembly lines to mass produce ventillators. One bought CPAP machines from China that hospitals had no use for.
AFAIK, the major car manufacturers' dealership networks are franchises. Yes, they have massive financial arms but they are for financing the vehicles, not for insurance.
Car manufacturers aren't by an large allowed to own dealerships in the United States. The point is, the number of dealerships is a good proxy for demand and sales. Also, dealerships by and large don't make much money on the sale of cars (due to having to purchase the cars from the manufacturer), but rather they make their money on the service and repair of cars. Even then, they're not really rolling in the dough.
General Motors's old financial arm was GMAC, now Ally Bank. Under General Motors's ownership, they offered credit cards[+], mortgages, and were in the insurance market since 1939. This is not an innovation.
[+] This was the only credit card my parents had for over a decade.
> but rather they make their money on the service and repair of cars. Even then, they're not really rolling in the dough.
Car companies already make huge money on service. Plus in sum, all dealerships combined make huge money on service.
Once Tesla has an large aging fleet they will make an absurd amount of money. Something people don't yet consider is that Tesla has been losing massive amounts money building out their global service network and because of having no fleet, making little money from it.
Tesla has industry leading margin now, while having negative margin on the highest high margin business for traditional companies.
It's not a good proxy for comparing demand and sales between Tesla and, say, GM. GM has a network of franchisees and Tesla doesn't, because Tesla wants the profits (sales, service, whatever) for themselves, but state laws won't let them own dealerships.
So, if you want to compare GM and Tesla's market caps, you need to lump the appropriate fraction of GM's franchisees' market caps in with GM's in order to make them comparable.
I've already addressed sales. It was trading at 161x future earnings before this deal. That's an insane multiple.
As far as summing up dealerships, let's go!
Tesla has 438 stores worldwide. Toyota has 1500 dealerships in the United States alone. GM? 4500 in the United States.
Do you honestly think that if we summed up all the Toyota dealerships in the world, it would be worth $750 billion? I don't, but that's how much they'd have to be worth to give Toyota a market cap of 1 trillion dollars.
Or to flip it around, even if we spotted Tesla manufacturing 2x Toyota. (Toyota is the most valuable manufacturer by market cap at $240 billion.), that would mean those 438 stores have to be worth over a billion dollars EACH.
It's even worse for General Motors. Their market cap is only 84 billion. The entire worldwide network of dealerships would have to be 11x General Motors proper, or over $900 billion dollars.
Agreed about 161 years, though I'm not sure how you can say "161x future earnings"; we don't know what the future earnings are, because they're in the future. I presume you mean "161x current [annual] earnings".
Generally I'd expect service and repairs to be of the same order of magnitude as sales, because if you have to spend $5000 a year to service and repair a $20000 car, you'll probably junk it and buy a new car that breaks down less, while if it costs you $500 a year to keep it going you'll probably either keep it running or sell it as a used car. One revenue stream might be two or three times bigger than the other, of course, and the profit margins might differ, and the dealerships don't capture all the service and repair.
I'm not sure what the number of dealerships tells us about the relative earnings potential. B. Dalton had more dealerships than Amazon ten years ago. (Or do we count B. Dalton and Waldenbooks as "dealerships of Hachette and Penguin Random House"?)
We can probably do a reasonable Fermi estimate of total dealership profits, though; 1.3 million car salespeople in the US probably means about US$60 billion in car sales commissions per year, which is about US$250 billion in car sales per year and something like US$25 billion in dealership profits; at a reasonable P/E of 30 years, the capital stock of US auto dealers would be worth about US$750 billion in total. https://policyadvice.net/insurance/insights/us-auto-sales-st... says the number of new cars sold in the US is 17 million a year, which suggests that these figures are in the ballpark, since it would mean that the average car cost US$14700, which seems maybe a little low for the US but not absurd. However, used cars are an additional 40 million a year, so maybe US$1.5 trillion for the capital stock of US auto dealers. Adding in whatever they make on sales and service, say US$3 trillion.
The worldwide number is 74 million new cars per year, 4.4 times the US number, so if we just multiply the US number by 3 (probably the average car in the US costs more), we get US$6 trillion for the value of hypothetical worldwide car dealership capital stock.
So, yeah, it does seem plausible that all the Toyota dealerships in the world would be worth US$750 billion, with similar numbers for GM, Fiat, etc.
Another thing, though, is that Tesla's vertical integration goes both directions, and you're not counting companies like American Axle & Manufacturing, Mold Masters Co., Grand Traverse Plastics, and Bosch as part of GM's market cap either.
So, I think buying TSLA at a P/E of 161 years is a pretty daring bet, and there's a significant chance it won't pay off. But I don't think the comparison to other car companies makes it look nearly as crazy as you make it sound, even if TSLA doesn't end up running our power grid on its batteries.
Exactly what so many people are missing. Unlike other car companies, Tesla run almost the whole value chain themselves, from software to hardware. In a way, they're an amalgamation of Blackberry and GM and Exxon and whatever in between. And they're also going into AI robots and home solar.
While these may be hits or misses, they underline the immense market penetration of Tesla. They're not just cars, which is why many investors project a much higher valuation for them in the coming years.
That’s true. But also, presumably, these companies outsourced their supply chains etc because it was (or seemed) profitable.
There is still a disconnect for me. First everyone outsources, apparently successfully for automotive, and that’s great, all these joint ventures between car makers etc. Then Tesl comes along, integrates everything, and poof that’s also good..?
I'm guessing the automotive industry benefited more from outsourcing because they were heavily unionized. Outsourcing parts allowed them to get the parts from sub-contractors that didn't have to pay union wages.
Tesla started much later and didn't have this problem.
So is Tesla another labour rights arbitrage at heart? That would make me sad.
It feels to me that even taking the company at face value, this valuation is just silly. And I thought that for years, so clearly as a short-seller I’d be toast. But the more the price levitates, the more unreal it feels.
No it isn't. The difference between union and non union is far smaller then people have in the idealistic fantasies.
Tesla employees are payed just as well, and with stock options they actually historically have been paid WAY, WAY better.
The thing about Tesla is that its forward looking for a long time since they have a stable leadership with a clear long term plan. This leadership has been leading the company for more then a decade and all their plans have worked out.
Tesla now certainty is worth now what they were valued at a few years ago.
For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy. But flat out, for me, I see them growing 50% a year for many more years with no end in sight.
> For myself, I would already consider electric flight as part of their future revenue. Its a logical next step but it will take 10 years. Of course I can understand that other people think this is crazy
That's extremely unrealistic. The aeroplane industry is extremely complex, and there are heavy regulations where (hopefully) Tesla's "move fast and break things" + use commercial grade stuff and refuse warranty ( was it the chips in their screens or the screens themselves in some models that were not made for constant use in a car) approach won't fly. 10 years is a decent development time for a plane, if you skip the parts that Tesla have no experience with it and there'd be plenty of R&D to make them work. For reference, Bombardier, a company with decades of aeronautics experience and an established supply chain, started work on the C-Series in 2004. First flight was in 2014, first commercial service in 2016, and it nearly banrkupted them. Unless Tesla are already currently working on an electric airplane, i call bullshit on them having one in 10 years. Considering they already have the truck and semi which are oversold and underdelivered/delayed, do you think they have the capacity to tackle such a huge undertaking any time soon?
As to your other comment that Airbus won't do it - they've been on it since 2010:
If one of the biggest companies in aviation has been working on it for a decade and doesn't have anything commercially viable yet to show for it, and estimate it will take them another decade for this, what makes you think a company with no aeronautics experience and history of overpromising and underdelivering can do it all in a decade?
> That's extremely unrealistic. The aeroplane industry is extremely complex, and there are heavy regulations where (hopefully) Tesla's "move fast and break things" + use commercial grade stuff and refuse warranty ( was it the chips in their screens or the screens themselves in some models that were not made for constant use in a car) approach won't fly.
People said the same about SpaceX. And yet they beat everybody. Tesla already works with SpaceX in a number of ways.
Do you think Musk or Tesla are not able to adjust to different industry? Are they so bull headed that they will say 'we make cars like this therefore we make planes like this'.
Tesla and SpaceX working together have the technologies required and the financials to do it, and just as important, the will to do it.
> was it the chips in their screens or the screens themselves in some models that were not made for constant use in a car
That this is still the example of 'look at this terrible company' is just embracing. A relatively young company on its first mass produced car made a mistake. Therefore for the rest of history they can never accomplish anything and they will forever be known as 'the company that selected the wrong screen'.
> it nearly banrkupted them
Tesla has better finances and ability to raise money.
> Unless Tesla are already currently working on an electric airplane, i call bullshit on them having one in 10 years.
Maybe that is the case, I don't have a fixed timeline. What I care more about is who will have it first, who makes the best and at what price can they produce them.
I don't think the existing companies will push hard enough.
I do think they are already working on battery chemistry needed for the airplanes. That is very much most difficult and unknown part about electric flight.
> Considering they already have the truck and semi which are oversold and underdelivered/delayed
The primary issue is battery supply. More products with a fixed amount of battery-supply does not mean you make more money. Overcoming battery supply and improving battery quality is the primary task right now.
> As to your other comment that Airbus won't do it - they've been on it since 2010:
Just as existing car manufactures had been working on EV since the 1970s. I think they are adopting some wrong strategies and they have very little intensive to kill their existing business.
The German car manufactures were still committing Disel gate when Tesla was producing EVs.
> estimate it will take them another decade for this, what makes you think a company with no aeronautics experience and
Maybe my estimate is wrong, but the earnings potential is there even if it takes longer. And Musk and SpaceX have lots experience.
How much experience did Tesla have in battery design and battery manufacturing 10 years ago? Almost non. 10 years later they literally have the highest output and fastest battery manufacturing line in human history producing their own cells with their own chemistries.
How much experience did SpaceX have with space capsule designs? Non in 2009 and in 2020 they launched humans. Lets consider relanding rockets, in 2011 they started working on it, they did it in 2016 and its totally routine now.
You can do amazing things if you have the will, the financials and the people to put behind an effort.
> history of overpromising and underdelivering can do it all in a decade?
People are so obsessed with that. They under-deliver because the promise insanely ambitious things. And even when the underdeliver, the results are still great. Should I be mad that they didn't deliver the Semi yet when instead the manage 50% YoY growth without it?
Why is nobody impressed that they are hitting their buissness targets WITHOUT interducing new products. That seem to be totally ignored, specially when 'lack of demand' was the main criticism of Tesla for a long time.
As it was with the Model 3, first people believe it want happen. Then when it does people say it wont scale. And then it will come on big. The Semi when it comes out will be just as demand constraint as rest of Tesla cars. Tesla will be a huge part of the global Semi market, I have little question about that. Its not like the other players in that space are rolling out massive amounts of electric semis yet either.
And anyways everybody will be battery constraint so for everybody Semi in large rollout will be tricky for everybody.
Again, I don't care if people don't agree with any of this. I don't give investing advice. Don't gamble with money I can't lose. There is a big chance this wont happen.
My thing is that I invested where the stock was way lower, so even if it goes down a large amount I am in the black.
I simply believe in leadership, no company with Elon as a CEO has really failed to grow. The closest is maybe Solarcity but he was not CEO.
Tesla threw Elon has strong connection with SpaceX. They already share material science. SpaceX uses Tesla battery technology. The connection is strong. Electric flight (not flying taxis) is a clear next step for both companies and Elon has been wanting to do it for a decade. It will take another 3-5 years before this is a serious project, but I don't think any other company is really up to it. Boeing and Airbus are not gone do it.
Until then I see continue 50% growth for a long while based on EV and Storage.
If Self-Driving works out, its massive. I am not counting on that. Even just as a advanced level 2 system its a great asset. But if it works out, the potential value is huge.
> Tesla’s stock price is confusing if you compare them to a car company. But they are not just a car company.
Tesla's stock price is confusing because it cannot be explained, let alone justified, by any market analysis, results, or market price calculation. It's purely willingness to pay driven by meme stock speculation.
> They are also a car manufacturing supply chain, having brought much of their component production in house.
This assertion makes absolutely no sense given that Tesla's market value is currently greater than Volkswagen's market value, and by no means is Tesla even comparable with Volkswagen in terms of any of the criteria you've brought up.
Stock prices are more about growth potential than existing size. Tesla is valued more than Volkswagen because it is expected to be bigger in the future (or VW is expected to be smaller in the future, or a mix of both). We’ve been through this before with tech stocks, and the enthusiasm for future growth has shown to be often correct, and also often incorrect. Playing the market is a bit crazy like that.
If your business model is an affine combination of other business models your valuation should also be an affine combination of the valuation functions of these business models. This is not the case for Tesla.
Do we actually have a detailed document explaining how much of their component production is actually in house? It seems like there are A LOT of common components between Tesla and others while at the same time they are clearly doing a lot of in house things that others dropped decades ago. (eg. Seat Production, having metallurgy department to come up with better alloys etc.) These are things other OEMs tossed to the curb decades ago.
> They are also a car manufacturing supply chain, having brought much of their component production in house. They are also an energy company, both generation and storage, but also distribution, like gas stations.
So basically a car company. GM makes their cars in-house. They own their own parts supplier (acdelco) and charging/distribution network (Ultium Charge 360). Ford and Stellantis are working on the same.
Tesla is an amazing company, however, still hasn't reached the peak of inflated expectations. As a seasoned equity investor put it:
"Tesla the stock isn't being valued by any metrics that make sense and today investors are paying too much for their future growth which is dangerous."
I am very happy with the Tesla company, CEO, marketing, and cars, but I can't believe that it should be worth 1 trillion dollars. A trillion is one with 12 zeros.
I know you can't compare valuation and production of a company, but still. If Tesla were making 10,000 dollar profit per car - and they don't - they would have to produce 100 million cars just to make a trillion. They produce less than 1 million per year. I know they also sell batteries etc. but it's still mainly a car company.
Their yearly profits might be a few billion. So their value is more than 100 times their yearly profits. This is insane for a manufacturing company. Currently their P/E ratio stands at more than 330. VW, a very well run auto manufacturer has a P/E ratio of less than 6, Ford 17, Mercedes-Benz 7, BMW 5, Hyundai 15.
These are all companies with electric cars on the road and a future that is totally committed to electric vehicles. These are all companies that already have production facilities, etc.
I like Tesla and their business model. I just think the stock is hyped way beyond what is sustainable.
Note, the EV revolution and Tesla being the winner of the EV revolution are different outcomes. They're certainly winning the EV race now, but it's possible that some of the other car companies can overtake them.
The bear thesis for Tesla has been something like, "Tesla might have an innovative EV-first design, but when the major manufacturers with a century of manufacturing know-how wake up to EVs, they will drown Tesla in vehicles."
I think part of what's driving the increase in Tesla's value is the realization that this thesis was wrong.
Tesla is now beating all the established manufacturers at gross automotive margins, and it's really not close. Toyota is around 18%, Ford and GM around 15%. Tesla is up at 27%.
Part of that might be demand-driven higher prices. But Tesla continues to reduce their cost of goods, and Tesla has emerged as the most innovative manufacturer, which we already see in teardowns of the Model Y, with huge sections cast as one piece, but particularly in the design of Cybertruck, and Gigafactory.
Tesla is far out in the lead on software. They appear to be rapidly improving on manufacturing. Tesla has paid down its debt with stock issuances, the company has $16 billion cash on hand, and the ability to go get a lot more nearly for free.
If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?
The major manufacturers still might catch up - once they really start caring. I agree with the posters elsewhere in the thread that predict the fossil fuel industries will collapse rapidly, rather than gradually - and the way I see it, major car manufacturers are still mostly trying to extract as much value now as possible from the ICE market.
But once the floor falls off? They won't go gentle into that good night. I expect a wave of bailouts, consolidation and rapid retooling (and playing every dirty trick in the MBA book there is). I wouldn't discount the possibility that some of the survivors will have enough infrastructure and engineering competence remaining to quickly become a serious competitor for Tesla. In parallel, Tesla itself may fall prey to one of many ways companies decay over time. And then, of course, there's China.
But all in all, as long as Tesla's current performance pushes EVs over the threshold of market acceptability (which I believe it did a few years ago) and gives it some serious momentum, it's "mission fucking accomplished", regardless of who's the market leader in 10 or 20 years.
The new all electrics from all the big auto companies are pretty good. As long as they do well enough to keep producing them, it will be incremental improvement year after year. I think Tesla has a good lead, but there is not going to be much value difference in a car that can go 600 miles on a single charge vs 300 miles. Or 0-60 even faster than 2.5 seconds. Once the big makers get within spitting distance of a Tesla EV (and I think they already are there). They will be able to really start eating into that market as their ICE market starts to fade.
Tesla clearly deserves a lot of credit but I think the EV space is a lot more fluid than some Tesla proponents would have you believe.
As EV adoption increases into more markets, buyers are going to be more price conscious, and plenty of makers (most of the big companies?) already have a foot in this space. Add missteps with safety or reliability in the long term (see: defrauding the Dutch government and the public about safety) and I think things might change quickly. Tesla isn't going anywhere but the idea that Tesla is the future EV market seems dishonest, naive, or both.
It's only a start for them when they'll start caring. Arguably, Volkswagen has been caring for a few years and they are just starting to produce decent EVs, somewhat comparable to Tesla.
> If the major manufacturers aren't going to catch Tesla with manufacturing prowess, or capital, what are they going to catch them with?
Brand loyalty or aspiration that predates EVs; cheaper entry price (already happening); build quality; better UI (the giant touchscreen is a negative for a lot of people).
There are lots of reasons to buy a non-Tesla EV. I know people who, being told that the Mach-E wasn't going to be available for a while bought another ICE to drive until it was ready. I know people who bought Hyundais instead of Teslas. Heck, one person even opted for a plugin hybrid because only the Tesla had the range he needed for work and he didn't want one.
A good chunk of people I know are already opting for not-Tesla EVs. It's a brand that seems popular with a subset of the population, but doesn't have the widespread love that people on HN seem to assume.
I also think it's weird that people are comparing margins on ICE vs EV cars. Obviously, those will different. You want to focus on their margins in the EV space.
It would be interesting to revisit these numbers after including warranty claims.
Toyota is someone that puts big emphasis on that part, so the difference when looking at something like a 3yr ownership might be a lot smaller, if not maybe even in Toyota's favor.
OTOH everybody is in a bit of an uncharted territory with the EVs and SW heavy cars. VW's new Golf has been riddled with SW bugs, and their EV line has not avoided it as well.
But the body panels, interior materials...
And Tesla (Musk) has said they need to improve the build quality and lower warranty claims.
So like I said- would be interesting to revisit these numbers, maybe not now, but in a year...
China's internal EV market is enormous, and by any reasonable metric Chinese manufacturers are already "winning that race". Several major cities have fully electrified their bus and taxi fleets for example, and most of those vehicles are made by BYD Auto, which was delivering more cars per year in 2012 than Tesla does now. But there's plenty of EV market to go around, both in China and elsewhere. BYD doesn't currently ship private cars outside China, only taxis and commercial vehicles like vans, buses, delivery vehicles, utility service vehicles, but this can change rapidly. The main reason this isn't currently happening is that they don't want to deal with consumer support outside their core market, and are more comfortable with institutional customers. However, I don't see it as a race. The main thing holding back EVs in both the Chinese and non-Chinese markets is infrastructure and obstructionism by fossil interests. I see that changing quicker in China than in the West (but I still have hope) so it's more likely Chinese EV manufacturers will expand more in China than internationally, until they see a more valuable market. Tesla is much more aggressively expanding in the West, and building out their own infrastructure to do so, and are the primary focus of the hate by western fossil interests.
If and when the landscape on the western markets changes to be regulatorily more favorable and provide sufficient charging infrastructure, I fully expect Chinese manufacturers to entirely own the lower half of that market, because even the cheapest Tesla can produce is way way more expensive than your average petrol car, whereas Chinese-made EVs are competitive with petrol on the Chinese market already now, and prices keep dropping. A new BYD e2 with extended (253 mile) battery sells for the equivalent of $25k. The Tesla model 3 sells for twice that on the same market. On the lower end, with smaller batteries, you have cars like the Levdeo i3 with 100 mile range which sells for the equivalent of $10k, and the phenomenally cute Wuling Hongguang Mini EV (75 mile range) which sells for the equivalent of $5k. Tesla still owns the luxury EV market everywhere, including in China, but there's simply nothing they offer in those price ranges, and that's where the big volumes are going to be in the future as infrastructure catches up. Still, because luxury cars have higher profit margins, I can see Tesla surviving and holding a large part of that segment.
There's also a huge market for EVs in the global South, where infrastructure is currently abysmal but there is extreme sensitivity to fuel prices. The market there can move very rapidly in response to even minor infrastructure improvements, and small cheap EVs would be the primary seller in those markets. Tesla has no chance there, but the Chinese EV vendors do.
If there's anyone losing the "race" it's traditional Western and Japanese car vendors. They fucked up time after time, and are the tail-end of the current EV industry. I don't see a path where they get their shit together fast enough to not be overrun by Tesla and a bunch of Chinese EV vendors, so they can only win by creating regulatory roadblocks.
It’s not really fair to be comparing Chinese domestic market EVs to US market EVs on price and range alone.
We can compare price and range alone among US market vehicles because they all meet relatively high standards of quality, performance, and regulatory compliance.
Developing nations have buyers and regulators willing to accept lower standards in exchange for accessibility, but the US market doesn’t.
BYD isn’t absent from the US market for any reason other than that they have chosen not to, because they’ve determined they wouldn’t be able to compete in that market.
Very little. First of all, a lot of cars are sold without this option, but most importantly, a large part the money isn't recognized as revenue yet, as the FSD isn't ready yet. A part of it is recognized due features like "summon" and "navigate on autopilot". But the large part of that money is still unrecognized revenue. There will be a boost to the revenue, when they can recognize the remaining part of the FSD payments in the future, but this will be a one-time effect.
This is interesting. You're claiming that the FSD money they collect isn't recognized yet? Can I ask you what leads to you thinking that? I'm sure it's in one of their financial disclosures, but you may be able to narrow it down for me.
I'm sure they were. I don't disbelieve you. I just don't quite get what to search for (or where) to find out how that policy works and what percentage of income they've already recognized.
This line of reasoning reminds me the time when Android came out and people were predicting the imminent death of then-newborn iOS. Tesla is Apple of car manufacturing. That much is pretty obvious if you drive one of their cars. They seemingly deliberately depart from what everyone else is doing. And my bet would be that they'll continue to do so, and continue building out technological capabilities that no other manufacturer would even be able to imagine, let alone build, such as e.g. their own AI training silicon, new battery tech, material science stuff, deeper automation of manufacturing, etc, etc.
That said, I don't understand their stock price either, even in the light of all that, so I don't own any of their stock.
But my next car will be a Cybertruck. Once you go electric there's really no going back. And that's how it ought to be in general: green options _must_ be better all around (perhaps with the exception of price, though I'm sure price differential will go down over time), not a fucking "tofurky" style garbage that no one would buy if it wasn't "green". Because you can make people tolerate things "for the greater good", but you can't make them like things that suck, at least not for long.
Can you explain what on earth that means? Apple makes good use of their device ecosystem, purchased app lockin and network effects to maintain an excellent position. Tesla has none of those benefits, other than their US (not EU etc. which is required to be open) supercharger network (which they promised to open to all EVs).
When I read your post (e.g. it's obvious as soon as you drive one, once you go electric you never go back) and both of those sound like arguments for EVs, not Tesla. Tesla may have made those two synonymous for a while, but I cannot believe it will last.
I will ask, are their departures from traditional manufacturing good? Even people I know with a Tesla that mostly has sat in a garage for its life (no need to commute during WFH because of COVID) say it's already showing extreme wear.
It means they bet on vertical integration, and they make product decisions no other manufacturer has the balls to make, and win because of it. Observe how _nobody_ can make a laptop that's better than MBP in spite of having several _decades_ to observe what Apple does. The same is the case here. Tesla has insurmountable avantage in this regard simply because they are not a "traditional" car manufacturer and have no "legacy" they have to maintain.
But the best explanation is to just go to a Tesla dealership and take one of their cars for a spin. It _feels_ like iPhone.
> Observe how _nobody_ can make a laptop that's better than MBP in spite of having several _decades_ to observe what Apple does.
I have noticed it in few other industries, I just find it amazing that some companies just dont want to change when you can clearly see that your competitor has a better product.
Norway is the most mature EV market in the world and it's not clear from the sales statistics that Tesla is winning. They sell a lot of vehicles, but not the most (might be winning in profits though).
Isn’t this due to supply constraints, at least in part? There simply are not enough teslas available to meet current demand, so they end up buying other brands to avoid waiting a few months.
I mean, if "Make the richest man on earth richer, so a few more news stories will be written about him, because that might lead people to look into EVs" is how you want to spend your hard-earned dollars, I'm not going to stop you. I'd suggest there are far more efficient ways to bring about social change, both in terms of fewer negative side effects and more bang for your buck.
The thing to understand about stock price is that it is based on perception and not necessarily on potential. Ultimately it boils down to whether you think someone will be willing to pay a higher price for this at a future point in time more than whether you think the company has potential.
Retail investors, and particularly first time investors, in the market have been growing rapidly. These kinds of investors tend to be less careful with where they invest, relying primarily on the media, word of mouth and hype than on fundamentals. With enough people you have a critical mass, creating a chain reaction that's impossible to stop. This is literally free investment for a company. As a serious investor, you would be foolish to ignore this. Even if the company was not positioned to do well earlier, this new found cash flow gives them a huge edge. And thus this creates a sort of a self fulfilling prophecy where more and more people invest, because they believe everyone else is investing, and because everyone else is investing the company will surely become #1 irrespective of where they are today, and inadvertently propelling the company to become #1 in the process.
Not to throw any pebbles in the garden, but if you compare to how religions work (the self-fulfilling prophecy side), I would not be surprised if that's how the humanity will proceed. Semi-religious leaders speaking of hypothetical progress collecting money to do anything they want with them from a bunch of retail investors.
Tesla's stock price has become a self-fulfilling prophecy.
It seems like Tesla's success combination of a genuinely good product, the Musk hype (and troll) machine, early mover advantage, and most importantly access to cheap capital to build vertically integrated manufacturing and distribution operations that are unheard of in this industry.
Tesla's playbook is also unusual and contrarian to traditional wisdom on a number of things - unlike most tech companies, they outsource very little of their core manufacturing, making it an extremely capital intensive operation; they rely on their CEO trolling on Twitter for building hype for their products; they make promises which they almost always underdeliver and frustrate early adopters with quality issues; they make unsubstantiated claims about their self driving tech and yet are still making progress that skeptics are ignoring.
This is what keeps short sellers, stock analysts, economists and B-school profs on their toes when it comes to their predictions on Tesla. Reminds me of the early days of the iPhone era where a lot of folks were convinced it is going to fail.
Lucky they have cheap equity capital because their debt is junk status. And some of the self-fulfilling prophecy is the cycle of good old WS analysts overrating an asset, Tesla, and their simple endorsement creates an inflationary cycle that generates a huge bubble and more me-too analysts - where have we heard that before? And we know how those end up despite all the transient commentaries that 'its different this time'. I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though.
Tesla as a company has basically retired all debt, they have 16 billion in cash and no debt. Their position is far better then other car companies.
> I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though.
Even if the Tesla stock dropped by 90%, Tesla would be perfectly fine. They do not really on raising money anymore. They create large amounts of free cashflow and enough profit to finance considerable future investment.
Revolution is years from now, the stock will surely readjust, especially once competing players enter the field (and people actually believe these players are playing in Tesla's league wrt. EVs).
I give them full credit for their EV technology, but I'm still pessimistic about FSD. How much of the current stock price is hinged on the assumption that FSD is 'right around the corner'? What happens if Elon pushes FSD out and it turns out to be a fiasco, possibly with catastrophic consequences?
They are worthmore than every car company combined. If they start making as many cars as Toyota will they be worth 10x as much as all companies combined?
It's not going to be a revolution despite all the EV bull market folks say, it will be an orderly transition, people are slow to change and adapt and STEM people should accept that. Electric cars are not in any way an order of magnitude upgrade in tech, which is a necessary trait for any technology that claims to be disruptive. Sure from a green perspective it is but not from a pragmatic one. I of course welcome the change. :)
I'd claim it's pragmatic too - but only if you have ability to charge at home AND you have an ICE car as well (maybe). Halving the cost of commute is highly pragmatic!
This applies to something like half the population right now (in the US). And we're on the path to alleviate issues for the other half of the population in the next few to several years.
The other major issue (which is probably the bigger one) is that car manufacturers other than Tesla can't seem to actually get out enough cars to do anything other than supply California and maybe NY. Teslas are expensive and have a litany of quality issues that push "regulars" away from them. Once Hyundai has an electric that has inventory nationwide at a reasonable price, then we have a revolutionary orderly transition on our hands.
Yeah this is kind of a big deal, like inflection-point big deal. Teslas are still for the well-to-do, but making infrastructure available may encourage even more investment in non-upper-end EVs.
Their price is fine if you look at the Apple analog. Not even knows they want a Tesla like not everyone knew they wanted an iPhone. It's not that they even want one, you basically have to have a smartphone nowdays. EVs will be similar in many many respects. And once someone tries one, that is it. There is no going back.
Of coarse there are other brands of smartphones, but not thing comes close to iPhone in terms of the brand, just like Tesla. There will always be metrics other brands can beat Tesla in, but the overall brand and product is unrivaled and will probably be so for the next 10 years. After that though, it's anyone's guess.
1. Nissan Leaf $28,375 - 150 Mile range for this price. (It is not advisable to drive this car long distances because the battery overheats and will reduce charging)
2. Mazda MX-30 $34,645 - ~100 mile range (ideal conditions)
3. Hyundai Ioniq $34,650 - 170 miles
Model 3 starts at 262 Miles and has the superchargers + most of the stuff Tesla is known for included (sentry mode, good UI software, games, etc). I don't know about you but it seems like a second gen car whereas the others are all on first gen.
All of the cars I listed are real street legal cars (no NEVs), available for purchase today (no concepts), that are plugin electrics (no hybrids) with a range in excess of 100 miles, with a price less than $40,000. These are viable inexpensive cars. That was the criteria. Arguing that these don't count because they're not comparable to one that costs 50% more, isn't fair.
The state with longest average commute distance is New Hampshire at 46 miles.[0] Even if that’s one way, that’s only 100 miles a day. Assuming you can only charge overnight, you’ll never use that extra range. You'll never even go below 50% if you can charge at work.
The software you’re citing for Tesla is gimmicks and cruel jokes. Why does someone need a game that only works when your car is parked and the screen faces the driver? When would someone use this? And even if you find the situation where you want to play a game in parked car, why would chose this rather than any of the games on your phone?
Tesla navigation last time I checked was Google Maps, but not Google turn-by-turn. That's odd. When I test drove a Model S, the salesman pitched some unknown streaming service as “like Pandora”. I’m sorry, but what? The car doesn’t even come with Android or Apple CarPlay.
I’ve used CarPlay, it’s heads and shoulders above any OEM infotainment system I’ve ever used. It’s so good, it’s a requirement for my next car. Assuming AndroidPlay (or whatever it's called) is just as good, why would anyone want anything else?
>All of the cars I listed are real street legal cars (no NEVs), available for purchase today (no concepts), that are plugin electrics (no hybrids) with a range in excess of 100 miles, with a price less than $40,000. These are viable inexpensive cars. That was the criteria. Arguing that these don't count because they're not comparable to one that costs 50% more, isn't fair.
My argument is that the cars are priced the same as Tesla. You are paying less but getting a compromised car in many respects(range, charge time, reduced interior quality/size). You are basically buying Gen 1 tech at standard price.
>The software you’re citing for Tesla is gimmicks and cruel jokes.
I think we are not going to agree on this but these days they have an excellent UI experience. You haven't actually spent an extended amount of time in a modern Tesla have you? These other cars you cite have gimped infotainment compared to Tesla so they have to be augmented with Carplay. Some people would prefer to use their iPhone as it can be upgraded, fair enough. Tesla decided to go in another direction.
But Tesla also throws in nice to haves such as Sentry mode, games etc. These are non-existant on the other platforms even as an option. Why would you value something like Sentry mode at 0$? It is a value add for some even if you don't want to use it.
>The state with longest average commute distance is New Hampshire at 46 miles.[0] Even if that’s one way, that’s only 100 miles a day. Assuming you can only charge overnight, you’ll never use that extra range. You'll never even go below 50% if you can charge at work.
This is Gen 1 EV mindset. You are paying ~35K for a car that can't go long distances/cannot fast charge? The Mazda cannot even match the 2012 Nissan Leaf. I was researching the Mazda as a potential vehicle since I really like their cars but this is not something I could fathom paying for and not feel ripped off. It is not fast, not really luxurious, has short range. It has no redeeming qualities other than it is Mazda's first EV.
At that point you are not getting 35K worth of value out of these cars. A basic gas car is more competitive at this price range. The collection of people who would pay 35K for a 100-150 mile EV but not buy a gas car or pay more for a viable EV has got to be quite small. In fact I'd wager that the car shortage + Carpool lane access in some states + aggressive incentives is whats driving any sales of these cars. In the case of the Mazda they are only selling in CA from what I understand.
The 2022 Chevrolet Bolt has a range of 259 miles and starts at $31,995. It has the "Super Cruise" that Consumer Reports rates as the #1 Assisted Driver tech.
Seems promising although I don't know if consumers will like the compromised storage space and the design. GM had an opportunity to really outshine after the v1 Bolt but it seems like they took an incremental approach to the v2 Bolt. It is a potentially competitive vehicle assuming they didn't cut corners like they did with the first Bolt such as using the worst seats in the GM parts bin. I guess many will ignore these issues but I wonder how many potential sales are lost due to the LG battery fires in the Gen v1 Bolt.
Check out the specs of a Model 3. Unlike most other cars, where the lowest spec means that most of the comfort equipment you want to have is missing, there are almost no differences between the tiers. The most significant difference is the size of the battery and that it only has RWD, otherwise it is mostly identical to the higher specs. Buying the lowest spec of the Model 3 is quite common as a result.
In Germany this marked niche is so under-served, there's a whole company (Nextmove) dedicated to rentals of electric cars. They position themselves as "try before you buy" experience, so you can do an extended test over multiple days to see if the car fits you.
There must be a business in tying purchase into rental companies in general. Rent car X and get your money back if you buy one in the next 3 months type thing.
Or "like the car you hire, pay X and keep it". There would have to be margin in that as rental companies usually sell cars to dealers quite early in their life and dealers are only going to pay bottom dollar.
I look forward to not having to give a flying fuck about fuel level upon returning my next rental car. Enabling rental companies to fill up their vehicles on-site without requiring becoming a gas station alone is a glaringly obvious rental EV win.
According to Car and Driver, a Hertz spokesperson said that ‘customers can return the EVs not fully recharged "for now," a difference from the rules for returning gasoline-powered vehicles.’
Sure, but that's "for now". They're not likely to give up that revenue source forever. They'll eventually have parity between the top-off costs for EVs and ICE cars and pocket the lower cost of gas. (although, it could easily not be a lower cost because of the cost in time.)
They will have to, at least for the foreseeable future. Having to rent the car another hour just to get it to a reasonable charge level is going to make gasoline rentals a lot more attractive.
"30 minutes to 80%" assumes every Hertz dealership is going to have multiple latest-gen superchargers. I think that's ... optimistic. Especially for franchise operations, some of which are quite run down.
Other than that, you're going to have multiple hours of downtime where that car is not making you money.
The cost of gas isn't $7.50/ga either, especially for a corporate account the size of Hertz. Doesn't mean they won't charge you that, though.
Assuming the rental market is at least somewhat comparative I doubt this will happen.
When you return a ICE car partially empty someone has to either bring gas to the vehicle or drive the vehicle to a pump.
Even though this is probably on-site it is very labor intensive and most rental places are pretty low staff. I could see future EV ones being entirely self service.
Anyway an EV can just be charged where you park assuming they wire each spot with an EV charger which I think makes sense since doing an n+1 charger is probably not much more.
I think the you will just pay whatever the normal charger electricity price would be.
Estimates are that each supercharger slot costs Tesla over $100,000 for permitting, install, equipment.
Have you been to a rental car company lately? Most don't give the impression of being flush with cash. In order to get the best charging speed and turn your cars around, do you see them laying out $100K per vehicle/slot?
Hmm, I cannot imagine why it would cost $100K for a super charger unless they are for some reason much more expensive then regular chargers. And again the marginal cost per charger has got to be an order of magnitude lower than the first charger because trenching is very expensive but each parking space isn't very far from each other. i.e I'm guessing that putting a handful of superchargers in a lot of different places is much more expensive than putting a lot of chargers in one location.
In any case, I know that regular charger's are very simple they are really just glorified relays so it might make sense to use non-superchargers if they are actually much more expensive.
Sure most rental places aren't cash heavy ATM but they aren't the ones buying 100k Tesla vehicles.
That's in public places. When you're doing a few in a row on ground that is already yours, it's going to be quite a bit cheaper. Not cheap, but cheaper.
are cars really going from one customer to another after an hour or so ?
Otherwise you don’t need to have superchargers, you can just use a normal charger which is a few hundreds dollars, probably less at the scale of Hertz.
So the time spent by a Hertz employee is 1 minute to plug and then unplug the car.
And if the car isn't fully charged and someone wants to rent it, they can either wait additional 30 minutes for full charge or get not-fully-charged car immediately and charge it at a later time.
Either way, it's effectively zero time and cost to Hertz.
I frequently (pre-COVID) saw cars were literally being turned as fast as possible because people were waiting for them. The idea that an N (N << total number of EVs) car wide throughput problem with 30 minute cycle time isn't a bottleneck is insanely naive to me.
I am pretty sure these companies will price in the time to charge and up charge the electricity rates. Considering they wouldn't want to fast charge all the time, they probably price in 2 or 3 hours of time of every rental for charging.
Considering the barrier to entry for these rental companies to fast charge and/or renewables charge (solar?) on-site is far lower than becoming a gas station, I expect this to just be another axis they compete on as things mature.
That should translate into savings and/or warm fuzzies for customers in the long-run, though it may take a minute before we get there.
There was no realistic scenario for rental companies to start competing on this axis with ICEs, petrol is an inherently hazardous chemicals royal PITA.
Hope they disable some of the Tesla Easter eggs. Having the road diagram turn into a rainbow and Don’t Fear The Reaper blast out of the speakers because you hit an on screen button four times is pretty unnerving if you’re familiar with the car and really wouldn’t be what you want having just got off a long flight and driving in a city you don’t know in a car you don’t know.
christ, I want a cool electric car more and more. but reading stuff like this all the time is just re-enforcing my decision to leave Tesla off that list of potentials.
A car is a tool I use to get my family around from point A to B SAFELY. Its also a fairly significant chunk of debt, and I want it to last a long time and behave EXACTLY the way I expect it to. Every day.
Thus far there isn’t really a no-nonsense EV with limited tech and phsyical buttons for everything. Once you go the big center screen route you are kind of locking yourself into an infotainment computer that will be obsolete long before the cars powertrain is and an interface that will change over time like a modern smartphone.
Once you know those truths, Tesla isn’t a bad choice as their computers are at least partially upgradeable and the interface changes have been decent from my perspective (although this is hugely subjective).
I see this sort of “concern trolling” so often around Tesla and I just shake my head. Really, an easter egg inspires this reaction? I’m sorry, I don’t believe it.
A good chunk of this is that Tesla's are designed very carefully for these exact tests.
I'm willing to bet performance would drop substantially if you modified the test even a little - for example changing the collision angle from 0 degrees to 5 degrees.
Other car manufacturers also 'design for the test', but less so I suspect.
That's only if you consider this a one time thing. Those 100K vehicles are going to need replacement in a few years. And considering, Hertz's stock price increase, investors are clearly believing this is a great deal for them. Which raises the question about where all their competitors will be buying their EVs. There are millions of rental vehicles. Close to 2M in the US alone.
The reasons Hertz is considered to be getting a great deal here by investors is that EVs retain their value a lot better and are known to have much lower maintenance overhead. So, they'll get more miles out of them before they have to sell them on, get back more when they do, and be able to charge a premium for them at the same time. In a market where margins are razor thin, that's a big deal.
It's more a question of when than if their competitors will be lining up to buy some EVs. They'll have to. And then of course the next question is which one they'd be buying. The answer for the next few years is that Tesla is one of the few companies that has both product and manufacturing ready for volume production. Of course a few other manufacturers might make some nice money here too.
So, investors are thinking that Tesla could end up supplying many hundreds of thousands of vehicles for rental per year in the next few years. On top of their other business, which is also continuing to grow at a very nice pace. They'll likely need a few new factories for this but they've shown they can deliver those as well.
This isn't just a very profitable deal for Tesla, it is a strong indicator towards that electric cars are really around to stay and that the electric car market is growing quickly. If it is more profitable for Hertz to buy Teslas than other brand cars, it should be for most car rentals and probably also most other customers.
Not too long ago Elon talked about Tesla making up to 20 million cars per year in 2030. That would make Tesla twice as large as VW, the currently largest car manufacturer. Of course this statement was treated as Elons typical optimism, but deals like this pave the way to that actually coming true.
I think this is profitable, but my post was about that the profit goes far beyond the money earned in this contract. Perhaps I shouldn't have used double negation :)
> Of course this statement was treated as Elons typical optimism, but deals like this pave the way to that actually coming true.
I feel people have really short memory wrt. Elon's optimism. Not everything he promises pans out (autopilot being the prime example), but usually, it does, just slightly later than promised.
Right, though it currently looks that autopilot is about to work out, if you look at the FSD beta releases (check the videos on YouTube). And the Hertz order points to the possibility of the 20M cars/year being not to far off both in volume as in time frame.
Check all the months. Tesla usually delivered them all in the same month/quarter as far as I'm aware.
It leads to a misleading number if not averaged over the other months.
> Normally, Tesla would deliver only a handful of cars during the first 2 months of a quarter and then deliver an incredible amount of cars during the last month a quarter.
I think people are doing the math on car TCO finally.
If nothing goes wrong, the first two-three years are practically free for an EV. Home charging costs pennies and if you're really stingy you can use free public chargers.
Then you might need a new set of tires maybe a quick maintenance at the dealership and you're good for a few years again.
A family friend just got an increase from their electricity provider to 0.44€/kWh due to increased costs of gas and coal. Assuming 18kW/100km (including charging losses) that's 8€/100km. Not very far from gas prices at the moment.
With Electricity prices topping $0.30/kWh in many places, this is no longer true...
Unless you also have solar panels at home and want to have the hassles of making sure your EV only charges on sunny days, you're going to be paying rates for electricity close to rates for dinosaur-fuel, especially if you're comparing to a modern 60 mpg gas car.
But even at those electricity prices, the cost per mile is still cheaper than with an ICE car. And fuel prices are going to raise further with higher carbon taxing.
60mpg (us) is 72mpg (uk), or 4l/100km. A Vauxhall Corsa may claim that[0], but I've got one at the moment as a rental and don't get anywhere near that, more like 45-50mpg (uk) - so about 40mpg (us).
That's 56mpg (American gallons are smaller). It's also a claimed number, real numbers tend to be about 70% of that, which would make it about 40mpg (US).
This is the best thing that could happen to EVs. If Hertz is throwing down, it's likely that National and Avis will follow suit. (National is partially owned by Ford, which might complicate things.) This was also my primary use case for Turo, so I'm excited to rent my favorite car from a conventional rental car company
I say this having never driven a Tesla, but are they really suitable rental cars? My understanding is that Tesla vehicles differ quite a bit from regular ICE vehicles, to the point that there's a bit of a learning curve to operating the car.
I'd be interested to hear from a Tesla owner on this. Maybe it's a non-issue.
>My understanding is that Tesla vehicles differ quite a bit from regular ICE vehicles, to the point that there's a bit of a learning curve to operating the car.
>I'd be interested to hear from a Tesla owner on this
Not a Tesla owner, but I did take one for a 30 minute test drive. There wasn't really any learning curve except for that when you let your foot off the accelerator (gas?) pedal, the regenerative braking kicks in, and you start slowing down very quickly. I didn't touch the brake pedal for the whole drive. Got used to it in a few minutes.
The hardest thing for me was the cruise control. Only a subset of autopilot features were enabled and I found it a bit difficult to operate.
Tesla used to have "Standard" and "Low" settings for how strong the regenerative braking is, but just found an article that says they removed the low option, which would be a bummer in my opinion.
Coasting is way more efficient than regenerative braking slowing your roll, causing you to need to accelerate again.
Hence why many non-car electrified rides disable Regen braking in Eco mode when your not accelerating or braking as keeping that mechanical energy & momentum is much more efficient than paying the conversion penalty to turn it back into electricity.
As far as I can tell, from the somewhat minimal GUI Tesla gives you, and the general feeling while driving...
You can "coast" with regen on, you just need to balance the accelerator at the point where you aren't adding power, but the car isn't taking power away.
You won't see any green or black on the power usage bar.
Coming down long mountain roads, it's somewhat easier than coasting in an ICE and having to continually shift down gears or ride the brakes (which is obviously bad).
This seems insane to me. "Do nothing and the car coasts" versus "balance this pin and the car coasts" is such a massive dichotomy shift that it seems like poor design. It's a car, not a helicopter.
You're massively overestimating the level of effort needed to hold the accelerator steady. The software seems to understand your intent and will help keep the speed relatively steady. Its not like making a millimeter adjustment of the pedal adjusts your speed by 20mph. It took me only a few minutes to get used to it. I'm able to keep a far more even average speed in my electric car than I am my ICE car, as now when I start getting off the gas it actually starts to slow down instead of coasting meaning I'm exerting more control in one motion instead of having to make two motions to achieve the same effect. I'm also usually smoother at slowing down in an electric with heavy regen. I never have to switch between accelerator, not pressing any pedals, to braking. Its just smoothly getting on the accelerator, holding it when I'm at the speed I want, and then slowly getting off the accelerator when I'm wanting to slow or stop. Then once the car stops I take my foot off the pedal and the car holds itself in place.
You're still thinking of pressing the accelerator as "open the throttle on the carburetor this much". On modern cars these days, pressing the accelerator is really more like "I'd like to go this fast", especially in electric cars. Its a vastly different experience.
I don't think I've actually touched my brake pedal in the last 2,000mi in my electric car, and I drive almost exclusively city driving on it.
If you his the accelerator steady, you can easily keep a pretty constant speed. It's not like you have to either be slamming on the accelerator or completely off the accelerator, you can keep it constant and hold a speed. I really prefer single pedal as with just the single pedal I get far more control of my speed than if I had to switch between two pedals. Want to slow down a little? Just ease up a little. Want to go faster? Just ease a bit more on.
I have not seen coasting modes to be more efficient than single pedal on my own electric car.
Oh my, this reminds me of a Lyft I got home from the airport once. The driver didn't know how to hold the throttle steady and was constantly on and off the gas for the entire 15 mile drive back home on the interstate. I was nauseous and nearly puking by the time I got home, even sitting in the front passenger seat because I'm already prone to motion sickness.
I'm hoping their car was actually broken in some way, because I'm assuming they had owned a license for decades at that point.
However, I'm pessimistic and curious if some people just learn to drive with the constant coasting on and off the throttle? Maybe it's an international thing? I'm not sure but I will never forget that ride!
Oh god, I feel you. That, but with a 2 y.o. feeling sick in the back, on their way to a pediatrician's office, was my wife's recent experience with one of the faux-taxi services (Bolt or FreeNow, don't remember which), and the driver was lucky - few more minutes of this, and he'd have to do a thorough cleaning of the back of the car.
Regen braking is one of the best features of an EV. I wish I could figure out how to make my Bolt default to 'one pedal' mode. I use the brakes less than 10% of normal now, and it helps me leave more space because I want to maximize the energy return by slowing more slowly.
It depends on the manufacturer, but some cars allow a coasting mode for when the throttle pedal is released and do brake blending for the brake pedal, which prioritises regen and only adds the hydraulic brakes when the regen brake force isn't enough.
This is unfortunate to hear. My least favorite thing about automatic cars is that the pedals don't increase and decrease the momentum of the car. Instead, the car slowly moves at all times unless the brakes are hit, and the "gas" is treated as more of a hint system for if the car should speed up or slow down.
As a non-Tesla owner, I'd love to rent a Tesla on my vacations just to try it before deciding on buying one. I'd say it's much better for renting than buying, as I know how I would use it beforehand.
> As a non-Tesla owner, I'd love to rent a Tesla on my vacations just to try it before deciding on buying one.
Me too. I actually looked into that a few months ago. In Boston Massachusetts, there is this place: https://www.teslarents.com/
But we were going to San Francisco not Boston, and there was nothing that I could google up. With the exception of Oslo, Norway; I've never seen so many Teslas as I did in the Bay area, but it seemed really hard to rent one for a few days.
Maybe by the next time that I'm there a Tesla 3 will be standard at Hertz, but in 2021 you'll be lucky to get a Nissan. The competence and availability of even that, was low.
I'm not sure that I "get" Turo. this is ... Airbnb for cars?
In any case, I don't think it would have worked for us, we handed the car back days later, in a different city. Which is fine for Hertz, but probably not for a Turo "host"?
It's likely that by the next time we're there, things will be different.
In my area there are multiple Chrysler 300Cs that are "available" to rent for $600/day.
Except they're not available. They're actively being rented for weeks on end.
Would be a great plan if you were a dealer. Have one of your customers rent your car for $600/day (no legit customer will pay that for a 300C), and you launder cash. Best part is you don't even need to actually rent out your car - they're not going to complain that they didn't get a car, because they never needed it.
Yes, like airbnb. The host delivers and retrieves the vehicle within whatever operating radius they want to offer, so two cities is very unlikely. However, I think there is some kind of variable delivery fee, so as long as you want to pay that and get the owner to agree to set a gigantic radius, it might work.
> You’re not able to set one location for pickup and a different location for drop off when you book your trip. But once the trip is booked, you can request to change your delivery pickup or drop off location. Once the trip is in progress you can still request to change the drop off location. The new location must be one where the host already offers delivery, or it must be within their custom delivery radius.
In what sense? They’re quite a bit quicker than ICE cars and regeneration is something you need to get used to, but nothing that’s radically different.
With these the big issue would be charging them - people might not know not to go to a gas station.
Also wonder how the “full tank” policy will work with EVs where ideally you want to hover around 80%
Where they might not be suitable rental cars is the reliability. There are some horror stories where people wait 6+ months for their cars to be fixed, based on parts availability, but Hertz probably has some service requirements built in the contract.
If they are ordering 100k of them, there's a chance Hertz gets a customized version of the software the specifically directs people to Superchargers and/or has some type of instructional flow they have to go through before they can drive.
>Also wonder how the “full tank” policy will work with EVs where ideally you want to hover around 80%
I thought for electric cars, that's already baked in? in other words, the car displays 100% and stops charging, but the battery is actually 80% charged. Also, I think for electric cars, they'll waive the "full tank" requirement or charge you a reasonable amount to make up the difference (cost of electricity plus a small markup). I sure as hell don't want to spend 30 minutes at a charging station the morning of my flight.
Nope, you can configure it, at least on Teslas. There's a slider you can adjust to tell the car how much it should charge to, so that with daily driving you usually charge to 80%, but if you're going on a roadtrip and want 100% - you can do 100%.
Someone found Hertz's updated Terms & Conditions. tl;dr you are expected to return the car with at least 10% charge.
TESLA
These Electric Vehicle Rental Terms (“Rental Terms”) are between The Hertz Corporation (“Hertz” or “us”) and You and apply to a rental of an electric vehicle (“EV”) from Hertz. An EV is defined as a vehicle that exclusively uses battery power rather than gasoline or diesel fuel. These Electric Vehicle Rental Terms are in addition to the Terms and Conditions of the Rental Agreement applicable to your rental.
CHARGE LEVEL AT PICK-UP AND RETURN– Hertz will endeavor to provide the EV at time of vehicle pick-up with a battery charge of 80%. You are required to return the EV with a minimum charge of 10%. You are responsible to maintain a sufficient charge on the EV during your rental. You will be responsible for the cost of any tow if the EV is not drivable due to a low battery. You are not authorized to call a private tow on Hertz’ behalf. All tows of the EV must be by flatbed and must be arranged through Hertz Emergency Roadside Assistance.
RANGE – Range is the estimated distance an EV can travel on a single charge. The EV information provided with your reservation that describes a range is not guaranteed. The battery life of the EV is impacted by a number of factors including weather, driving and road conditions. It is your responsibility to ensure the EV has sufficient remaining battery life to return the EV to Hertz or reach an EV charging station.
CHARGING DURING RENTAL – Subject to Tesla’s terms and conditions, Tesla EV’s are able to access Tesla Superchargers to recharge the EV. If You use a Tesla Supercharger to recharge the EV during your rental, that cost will be billed back to Hertz and added to your rental charges. These charges may not appear on the final invoice and may be added later due to processing time. Battery charging limit on a Tesla should be set at 90% maximum. You may recharge the EV at other public or private charging locations at your own cost. You may also have to register and incur a fee at certain of these locations. You are responsible for any registration (including accepting terms and conditions and privacy policy) and any fees. If You do not move the EV promptly from the charging stall when it is finished charging You may incur an Idle fee for the time the EV remains in a charging stall after it is finished charging. You are responsible for and will indemnify Hertz for any Idle or similar fee incurred when the EV is on rent to You.
DAMAGE TO CHARGING STATIONS – You are responsible for any damage to the EV, the charging station equipment or the charging location when charging the EV during your rental. You will indemnify Hertz for any charges, fines, or penalties You incur for any damage or loss to the EV, the charging station or location during your rental.
EQUIPMENT – The EV will be provided to You with certain equipment for which You are responsible. You are responsible to notify Hertz if any of the following equipment is not with the EV at the time of pick up. Otherwise, You will be charged for any missing equipment at return. Loss Damage Waiver (LDW) does not apply to damage or loss of the equipment provided with the EV.
Key card or fob – You are responsible to return the Key card or Key fob upon your rental return. If the Key card or fob is damaged or lost, You will be charged to replace the Key Card or fob and a service fee. The Key card or Key fob must only be used to charge the EV You have rented. Sharing the Key card or Key fob, using additional Key cards or Key fobs to charge the EV, or charging other vehicles is prohibited. Any misuse of the Key card or Key fob in breach of these Rental Terms will result in additional usage charges.
Tesla Charging Kit – The Tesla Charging Kit consists of 1 Mobile Connector; 1 Storage Bag; and 1 NEMA 5-15 Adapter. You are responsible to return all contents of the Charging Kit upon your rental return. If the Charging Kit, or any part of the contents are damaged or lost, You will be charged for a complete Charging Kit, as these items are not available to be replaced individually, and a service fee.
J1772 Adapter – You are responsible to return the J1772 Adapter on your rental return. If this Adapter is damaged or lost, You will be charged to replace the Adapter and a service fee.
DASH CAM AND PERSONAL DATA – The EV may be equipped with a Dash Cam which may record incidents involving the EV during your rental and privacy is not guaranteed. You are responsible at return to delete all personal data input by You or collected by the EV during your rental.
The drive stalk and the parking brake, sure. But are you explaining to them how to shift into neutral? How to turn on/off the windshield wipers? Headlights? Pairing phones to use as keys? How to use the valet card?
I have a model 3 but I forget this crap all the time. They'll need to provide decent documentation beyond the touch screen (and I'm sure they will).
Most people won’t need to touch those things. Headlights and wipers are auto by default. Neutral is needed for car washes or towing which are both abnormal situations for a rental.
And I kind of doubt they’re going to let you pair it with a phone key to the normal Tesla app like you own the car.
I hopped in my Tesla for the first time and after a single stop sign where I stopped kind of weird (not honestly that bad), that was it. The Tesla person on the initial lesson assumed I'd driven one before. You get the hang of it really quick. Same story for many other people who've driven my car. If you're not using regenerative breaking it's pretty much like a normal car sans the small acceleration gas cars provide with no braking.
In my experience cars with diesel engines and manual transmissions also had the tendency to creep forward instead of stalling while in first gear when neither brake nor accelerator pedal was stepped on.
All cars will creep forward with the first gear on. The thing is, if you're already going faster than 10km/h, they'll decelerate towards that surprisingly quickly.
Not really. On petrol cars, if you let go of the clutch in 1st gear and not pushing on the gas, you'll most likely stall. Diesels often don't do this, and creep instead (all of this assuming you're letting go of the clutch slowly enough, otherwise, you'll stall for sure)
It depends on the condition of the clutch. If it’s a newer clutch or in great shape: definitely not once the gear is fully engaged. I can’t drive my petrol cars in forward or reverse at driveway speeds without riding the clutch a bit to stop from going too fast.
Yea, this is sorta true. If you leave a manual transmission car in gear then the momentum of the pistons, and the minimal gas it's fed to prevent stalling in neutral, will give a very slight push at sufficiently slow speeds. It's much smaller than the effect you get from an automatic, though, where the gas delivered to the engine is enough to keep it from stalling even when shifting to drive from a dead standstill.
Mostly I'm thinking of the situation where you break to a stop. In a manual, you have pushed in the clutch so the wheels are completely disconnected from the engine, giving zero creep when you release the brake, whereas in an automatic the car will start to creep.
I rented an electric Zipcar recently (not a Tesla), without any previous experience of electric cars. My only problem was switching it on, which doesn't quite work like an ICE and there is some control position you need to adopt before it will let you do it. The ten minutes I spent on that were quite frustrating, since I was late and it seemed like I might not be able to get the car to work; also because Zipcar charge by the minute. But I had no problems after that.
Try a test drive sometime. The Tesla stores only need to give a minute of explanation. A rental employee would do the same thing. They are easy to understand.
My concern with renting one (which for now would stop me from doing it), is the scarcity of charging locations. Not sure how far apart they are in most locations nowadays, or what wait times are like, but if I'm on vacation (which is when I most often rent), then no hassle is worth it. There are gas stations everywhere.
Tesla have a massive charging network of their own, plus you can use all/most of the other public charging stations. In most locations in North America, Europe, Australia as well as some Asian countries you have good access to charging infrastructure.
Tesla's navigation software will show charging locations, as well as add stops automatically if you're planning a route that's too far for the current state of charge.
Plugshare is a good site for finding chargers of all types.
When you rent a car, do you pick the type of car today? I always have, I usually see a big list of cars, where larger/more luxurious is pricier. I imagine that's what Hertz will do here. Teslas on the menu, but if you don't want to, or are driving more than 200 miles, you should just go with a Camry.
I was dubious renting a Tesla on turo in Hawaii but I think you would find that charging an electric car at the places you are staying is increasingly an option that is lower cost and less stressful than going to a gas station before going back to the airport.
I also suspect they will have lower backend operating costs and potentially cost drivers less on additional insurance since they can operate in FSD and put the liability on Tesla.
How wonder how Hertz intends to handle turnaround delays. If I turn in an ICE car at noon, they can clean and gas it and (as a guess) a new customer can drive away in it at 12:15. With an electric, filling it with energy could take quite a long time. I'm sure Hertz considered that, but I wonder how that works into their calculations.
Takes around 30min to 80% charge a Tesla. Have you ever been to a rental car lot? It's almost always full of cars. And when not full, it's because of the same event everyone is renting for, which doesn't indicate fast turnarounds. There's plenty of extra inventory to charge all the Teslas between customers.
Their lots really aren't "always full of cars". A lot of rental companies, especially franchises, have sold a lot of their cars due to reduced demand and insane used car prices.
That's due to a miscalculation around the sudden death of demand due to a global pandemic (which bankrupted a bunch of car rental companies, including Hertz). Now that demand is back, they're rebuilding their inventory, as exemplified by this 100k car order. Things will stabilize, and lots will mostly go back to having plenty of inventory in not too long.
Not the person you asked the question to, but... I've rented recently (1 month ago). The parking garage was filled with an absurd number of unused cars. There were entire levels of the parking garage which were filled with cars which weren't being used because the rental car companies associated with that floor weren't even open. Meanwhile the rental car operator which was open wasn't even close to having rented out all their cars.
Recently I've had a hard time finding available cars. Many times in my life, I've had to wait while they turned around a car that had just been returned.
Cleaning and turning around keys-in to keys-out in 15 minutes probably rarely happens at Hertz in what I've witnessed (I've rented >100 times from them). But that said, most cars probably will come back at least 50% charged, so it is only 15 minutes to charge (while cleaning in parallel).
And perhaps if you're a customer picking out Model 3 cars on the lot and you pick one not fully charged.. you could decide to wait it out or just drive.
Yeah this is not really going to be a problem. Cars spend a lot of time waiting, so rows of 120V outlets will do plenty. Level 2 chargers can keep busy cars topped up. They could have superchargers for fast turnaround, but as a renter I frankly don’t really care. If there’s a supercharger near the airport (and, newsflash, there is) then all I really need is to take the car and return it at half charge or better. Having it be fully charged at pickup is nice, but not necessary.
FYI Hertz already announced that they will require a minimum charge of 10% for returned cars. So they thought about it and deemed it worthy to comment on in the announcement.
If you don't require your customers to return a full vehicle, they don't need to deliver them full to the customer either. I experienced this in Croatia when I discovered they are actually not allowed to require the car be returned full (some local legislation apparently). So they delivered it about 3/5th full and I returned it back in the same state. They just eyeballed it and it was fine. Actually annoying like this because I had to remember when to fill it up (and by how much) in order to return it with that quantity. In the end I put about 10 liters in it when it was about 2/5th and then drove another 20km.
They'll probably do a quick top up using their own chargers while they are cleaning the car. No need for them to charge to anywhere close to 100%. It's actually bad for the battery to do that regularly. So, it's also not something they'd want their customers to do. Anything over 10% is fine and can be topped up in 20 minutes or so to about 70-80% if you have the right charging infrastructure. But probably lower once they start cutting cost a bit. I wouldn't be surprised to get a Tesla rental with 40-50% charge only. Plenty of range on that and I can fix it at the next super charger in 20 minutes. For free because its included in the rental price (also announced). They just eliminated fuel as a variable cost for the driver. They'll probably charge per mile instead.
> FYI Hertz already announced that they will require a minimum charge of 10% for returned cars. So they thought about it and deemed it worthy to comment on in the announcement.
That may just be to help avoid people planning poorly and running out of battery trying to just barely make it back to the return. There's almost certainly nothing magical about 10%, and charging the car from 5% will be almost no difference. It wouldn't surprise me if they don't charge a fee as long as they can still get it over to the cleaning bay or a parking spot with a charger.
They're likely just setting ground rules for people who have never used EVs. It's not quite as easy to solve if you run out of juice half a block away from where they want it to be returned. Or if it won't start but you got it parked in a spot out front without a charger. "It doesn't need to be full but please leave 10%" is a fair rule of thumb.
> If you don't require your customers to return a full vehicle, they don't need to deliver them full to the customer either.
Every U-Haul I've rented in the US works the way you're describing: you fill it to where they tell you. Not to a full tank.
I think that especially when you're looking at multi-day rentals, Hertz doesn't really need to turn things around.
rent the car in the morning, keep it for a while, you bring it back some evening, it gets rented out the next morning.
It's like hotel rooms. Sure you could clean them in 5 minutes after someone steps out the door, but is someone actually there to take the room afterwards?
You have to also account for the free 1/8. Really enjoyed returning all my cars at 7/8 and them considering it returned full :). Part of it is most fuel gauges still read full anyway.
actually, I nearly always buy the tank because my time is worth more than <$x>, it's one less thing to stress about, and the refill prices are really punitive and when it's on your dime, they top it up.
> Car-rental firm, recently emerged from bankruptcy under new ownership, orders vehicles by the end of 2022
That does sound crazy that they re doing it while they ll be still in pandemic, which bankrupted them in the first place. I guess in the US people can always find a charger. I wonder how many people will rent those cars for the novelty factor, and novelty only works once. And it will be interesting to see what people think after they have rented one
Many people are wondering where Hertz found the money to make this purchase.
> it will be interesting to see what people think after they have rented one
They will absolutely love it, just like I did when I rented one on Turo and then bought a new one the very next day. Also, the Hertz crowd is exactly the right target customer for Tesla. All of which shows how brilliant this deal is for Tesla, and how incentivized they must have been to make it happen. Which likely answers the question above.
I wonder if the goal is to consume the market so it's more difficult for other rental car companies to get Teslas?
Personal anecdote but I already am generally willing to pay a slight premium for Hertz over other rental companies and would be willing to pay slightly more still if it meant renting a Tesla.
The beauty of being the first in the market. All the manufacturers with the shiny new EVs will have a higher marketing cost because Tesla is able to get the free PR and the best co-promotional deals like this one.
Car rental companies (including Hertz) sold a bunch of cars and that combined with increased cleaning and a return to volume means rental car inventory is very tight at some locations... it's no surprise that they're ordering more cars. These particular cars, maybe a little surprising, but they sold a lot during bankruptcy, so they've got to restock.
I assume there is a little bit of a "meme stock" element to this, the reddit folks will love it, but I think I would pay a small premium for an electric car when renting (unless I needed long distance). More likely I pay a premium for that than for than the higher end ICE car options at car rental.
The problem is that when you are renting from Hertz you are probably new to the area and don't know where you are going and if there are any charging stations nearby.
My main car rental situation was travelling to work headquarters where I had in the past lived, and renting cars for weekend trips because I did not own one. In both cases I would choose electric and was familiar with the area. But I may not be typical.
Where I live, it is exceedingly hard to get anything electric or even hybrid as a rental. Sometimes I wonder why that is.
There are companies offering EVs for short-term rentals by the minute or hour, but not as many of the big companies which seem to treat EVs more as a curiosity and group them with Maseratis or Luxury SUVs in terms of price and availability.
I hope this news is enough to shake up the leadership at the other car rental companies.
Hybrids are flying off dealer lots...and have been for the past few years (at least the ~40mpg crossovers have been). The limiting factor right now is parts (and was pre-pandemic too, just moreso now). As car rental companies tend to take the less desirable cars/configurations, they're just not getting any because manufacturers can sell them for more to the general population.
Non-Tesla (i.e., cheaper) EVs have been in the same boat - the ones that people want just flat out haven't been available in most locations.
The business model of rental companies require them to resell their cars every 2 or 3 years.
Probably they were afraid because a used electric cars market is still something that is not very established.
They could, but I don't know if people would like it. When you're running late for a flight it takes three minutes to drive through the (somewhat overpriced) airport gas station and throw $20 in the tank, but with an electric car that could be twenty minutes (assuming the airport had a charger available). Which means you're stuck paying Hertz to fill it for you at their crazy markup.
Of course, the answer with most electric car charging questions is "charge it at home", which is great when you own the car, but when you're on a trip who knows what the hotel's infrastructure will be like.
I can do an after hours return with a gas car at 3am and spend the 3 minutes to fill up the tank before I leave it on the lot. You can't really do that with an electric car unless you want to pay a extremely high fillup cost
If they installed basic charging points at a reasonable number of parking spaces, it would be reasonable to allow people to return the cars without a full charge, so long as they plug them in.
(I mean a charging point that can charge the car in 5-8 hours, which I assume should be straightforward for a new commercial installation with a 3-phase supply etc.)
I dunno how long it takes to fully charge an EV but it seems to me the market would eventually figure out a way to just not require retiring the car full. The first rental company that does this for free will outsell all the rest.
That being said I also don’t know what the turnaround on a returned car is when on a busy lot. Minutes? Hours? Days? They gotta wash and vacuum it at minimum.
My guess would be a couple hours. They could start charging them right when you park at the return line…
I do kind of agree, but I have not much hope for a free market where a company wins by being that much better than the rest, where they could just go with the flow and charge the same fees as anyone else.
With gas cars, there's a clear cost to having an employee go out and refuel it if its not returned full. This is much less justifiable if the company can just charge the cars on-site, either quickly or slowly.
A compromise could be that if a car is returned with less than x%, where it must be charged before going out to the next customer, then charge more but if its returned with 80-100%, don't charge extra because it could go out to the next customer easily. I've rented plenty of cars without a full tank.
I'm not sure that should be a problem so long as they are returned. I don't know the exact turn-around times for rental car companies but you can charge a Model 3 to full in 5 hours or so with a 240.
Though I think another issue could be wear and tear on the battery as you're not supposed to charge to full - can rental companies software lock the charge rate? Not yet as far as I know.
No I mean you can charge your battery to 100% but it degrades the physical battery over time. I think this looks to be a separate issue affecting cars made in 2016.
"Only Model S and Model X vehicles with 85 kWh battery packs, which were discontinued in 2016, seem to be affected at that point."
I am wondering if such a big order comes with a special deal with Tesla for "rental app" or special "rental mode" in Tesla app. As a Tesla owner I would like to carry over all my personal settings and customizations to cars I rent and I would prefer to use familial Tesla app to unlock and control car.
I've wanted to try a Tesla for a while now with a view to purchase. There's nowhere near me to rent one (Turo isn't available in my state) and I'd gladly rent one from Hertz. This is a move that could do wonders for EV sales. Exposing people, without commitment, to EVs may just quench some lingering doubts re: charging, etc.
Mea culpa. I was definitely unclear. I'd like something more than the usual hour long test drive from the showroom. The questions I have regarding Tesla and EV require testing on longer trips, using the charging network, etc. Being able to rent a car for a few days for a longer trip will tell me all I need to know.
I was once told, by a car rental chap, that the rental companies don't make money renting out cars; instead, they make money by putting some miles on the cars in their fleet, and then reselling them at a profit.
He told me that the deals the rental companies have with the manufacturers are along the lines of "you will buy 5000 cars at a large discount, but you can't sell them until they have 5000 miles on the clock". So they buy lots of cars at a HUGE discount and then later sell them for MORE than they bought them for.
If this is true, then it makes sense for the rental companies to invest in EVs, because (a) there is customer demand for them, but more (b) because the market for second hand EVs is good.
If they can sell them for more than they purchased, why even drive them for a bit?
I think rental cars have a lower value/prestige compared to single-owner used cars (the idea being people are rougher and more careless with a rental they only use for a few days).
So much of the “never buy a rental” stigma is ICE-specific. EVs don’t rely on hundreds of hard-to-reach soft parts that can disable the vehicle if you drive them too hard.
But I’ll definitely be checking the battery and motors before buying a used EV.
Hertz just declared itself bankrupt a year ago, now they have 4bn cash to spare? Both things cannot be true in such a small timespan.
Either the 'bankruptcy' was a fraud, or the Tesla deal has some small letters like "of which we will acquire 1,000 per year for the next 100 years".
Sure, the official story is "we were bankrupt but we found new investors at the most convenient time", but that could've easily planned beforehand. Also, they raise 1.65bn [1], but suddenly spend 4bn? The math doesn't add up.
They filed for bankruptcy because they couldn't make their lease payments. That doesn't mean they were not viable and needed to liquidate everything, it just means they couldn't pay on time and needed (or wanted) some more time to arrange things. Filing chapter 11 gives you some more time to make payments and come up with a plan to return to operations and pay back debt. Shareholders and creditors agreed to the plan, and it's back to business (well, business continues during Chapter 11 anyway).
I didn't see any details on the purchase deal, but maybe they'll come out later. There's probably provisions to change the amounts, and certainly these vehicles will be financed in some form, whether that's Tesla financing or otherwise.
>Hertz just declared itself bankrupt a year ago, now they have 4bn cash to spare?
where did you get 4B from? presumably $40k per car multiplied by 100k cars? The cars are probably financed, so they don't really need the entire $40k upfront. Using the tesla leasing calculator https://www.tesla.com/support/tesla-leasing, a $40k model 3 only costs $19,299 for the first 36 months.
>Also, they raise 1.65bn [1],
the source you linked says the 1.65B is from coronavirus relief. It doesn't preclude them from raising more through other channels, eg debt/equity.
>the source you linked says the 1.65B is from coronavirus relief. It doesn't preclude them from raising more through other channels, eg debt/equity.
Sure, but I doubt they raised more than 4bn. Even if they did, don't you think is a bit fishy to suddenly spend your whole lifeline in (not a few, but) a hundred thousand electric cars?
They don't need 4bn, and it's very normal for them to enter some big long-term contracts for more cars, and the upfront and first-year spending for this won't get anywhere near 1.65bn. So no, not fishy.
Makes sense. I'd wager a good chunk of rentals (especially business use) use under a single charge worth of mileage and the reduced maintenance fees are probably a big deal for Hertz.
I'm not surprised! Everyone is talking about the technical suitability of EVs as rental cars. But I don't think that's the main motivation.
On Turo (like Airbnb for cars), Teslas are unique in how disproportionately expensive they are relative to their purchase value. When I last checked, a Tesla Model 3 worth 50K would rent for up to $200/day. Compare that to a comparable $50K BMW which might rent for $80. I imagine the reason is that people just want to rent a Tesla to see what all the hype is about.
Also, rental companies only keep their cars for about a year, so this situation doesn't have to last long for it to be profitable for Hertz.
That's a major hit on Ford - Hertz has long been a "Ford house" and at one time (1990s) Ford owned Hertz and they were Ford's largest customer (#2 was Hewlett-Packard).
This news should take into account the current rental car market situation: that is, absolutely bananas.
Rental companies buy cars on leverage, and sell them used after a short lifespan. They sold off their inventory at the start of the pandemic and now can’t refill due to chip shortages, etc.
The used market is also crazy inflated, currently, but these companies couldn’t take advantage of that appreciation.
It's quite simple to figure out, once you understand no electric charging and consumption can happen without the knowledge of the car computer, which is programmed by Tesla, which just received a $5 bilion dolar order from Hertz. Surely they can fit a bit of Hertz-specific "charge monitoring" code in this price tag.
In fact, electrics open up a whole world of pricing and customer ripoff models.
Instead of charging you $5 a gallon, they can even charge $.50 per kWh (or translate it to miles) and that's something like a 3x markup. Even more if they use a renewable energy source.
In my rough calculations, it costs something like $5-$7 to charge from empty to full on my Model-3 mid-range.
My ICE car is $50-$70 to fill the tank (26gal/100l) from empty to full. And gets me 450-500 miles. So I'm a tad bit jealous, just not enough to take on a car payment.
Our second car is an older Beetle and we've kept it around for exactly that reason, it's paid off, and even the occasional repairs needed on it annually are way cheaper than a monthly auto loan payment. When I used to commute (pre-COVID, I'm never, ever going back to that), we still used it.
Exactly. When you are running late to get to the airport, stopping to charge your Tesla is a bigger delay than stopping to gas up a car, so this will likely give them even more people they can gouge.
And having a charger at the hotel you stay out won't be enough considering how many times I have filled up the tank the night before, but they could still tell that I used gas just driving from the hotel to the airport.
"San Francisco area households paid an average of 26.3 cents per kilowatt hour (kWh) of electricity in September 2021." [1].
The standard Model 3 has a 50kWh battery, so the cost is roughly $13.
If you charge between 23:00-07:00 the cost is reduced to $7 [2], though presumably that incurs the cost of installing an extra meter. It would be $9.50 sticking with a single meter for house + car.
(For what it's worth, in Denmark the lowest I'm charged is currently double the night rate for PG&E, although the peak day rate is similar. It varies depending on demand and how windy it is forecast to be [3]. But petrol is $2.10/L, so the other commenter's 100L car would be $210 to fill — though at 12.5L/100km, it's pretty inefficient. New vehicles in the US use 9L/100km, in the EU new vehicles average under 5L/100km.)
[1] is not a good measure, because of low income subsidies not everyone qualifies for. I live in the Bay area, and I pay 35-41 cents/kwh in summer. Now if I charge during the nights with the EV plan, I get preferential price of 14 cents/kwh but that makes my day time use (for other things) that much more expensive. Sorry, I didn't mention I drive a long range model 3, and quoted the price for it, not the parent's mid range.
So if they're doing it the way EHI's been doing it: there won't be a need to recharge. I've received half-full EVs from EHI and returned them almost entirely discharged without any surcharges.
I deeply hope they don't charge you for electricity, that would be a huge bummer and really counterproductive to their goal of having these luxury cars actually feel luxurious.
LFP batteries can be fully charged and Tesla is switching their standard range vehicles to LFP. It's possible that Hertz is ordering standard range / LFP Teslas.
Car rental companies aren't in it for the long term. iirc they hang on to a vehicle for an average of something like 8 or 9 months (Was told this many, many years ago, so probably a bit out of date, but probably not off by much.)
“How do we democratize access to electric vehicles? That’s a very important part of our strategy,” Mark Fields, who joined Hertz as interim chief executive officer earlier this month, said in an interview. “Tesla is the only manufacturer that can produce EVs at scale.”
> All those companies currently make less than 100k EVs per year.
That's because they mostly make disposable compact hatches and the demographics that buy disposable compact hatches are not the demographics that spend a premium on an EV. They buy an ICE Mitsubishi Mirage or something. Telsa makes money hand over fist because they're the only one making EVs targeted at white collar demographics who drop 30-50k on a car.
Nissan could crank out 100k Leafs/year if they felt like it. But Hertz doesn't want 100k leafs/yr because they're not trying to fill a hole in their economy hatch portfolio. They want 100k sleek fancy sedans with some brand image to go with them. And Tesla is the only people making that right now.
Everyone with a bit of AI/ML knowledge already knew this but from this story it should be clear that Tesla's plan to convert their fleet into self-driving Taxis is basically dead.
You can't buy out a Tesla lease because they are using those lease returns to stock their self-driving fleet. And until this changes then Tesla's plan is still in play.
Perhaps Tesla should explore the opportunity of operating their own rental business. They can't possibly be any worse than the existing rental companies.
Resetting the system and clearing out any personalization. For example most rentals will have a huge list of contacts saved from people who paired with Bluetooth and unthinkingly let the car have all the contacts (which I was guilty of doing until I got wise to it).
The opposite is a good idea too, upload your locations to Hertz and they could pre-load GPS on the Tesla with where you're going as saved locations, contacts, etc. and then wipe them when you return the car.
I bought a used Kia a few years back, and the GPS/head unit had many addresses still as saved destinations. I could have easily figured out who owned the car, which shouldn't happen.
Limiting speed, monitoring location, monitoring of “safety score” (attempts to measure things like “aggressive turning”), low cost of maintenance (no oil changes, etc), drivers are purportedly safer with autopilot than without
Is it just me that see that something funky is going on there?
Hertz is just out of bankruptcy, and immediately they order 100,000 Tesla to be delivered, and so paid I guess, in just 1 year!
Let's imagine that they have the Tesla with a very good discount: 30000$ a piece.
That would cost them:
100 000 x 30 000 = 3 000 000 000 $
I have hard time to believe that they have that cash in hand, or that they can borrow that much!
In my opinion, this might be the long awaited event that will finally blow the bubble:
Like for Evergrande, market will discover that Hertz can't afford that, then the stock of Tesla will tank, then panic and crazy stock crash will follow.
I think you are thinking about it wrong. A lender will happily lend $3B discounted slightly because the loan is secured by… $4B worth of Teslas thanks to that bulk purchase discount. Now, imagine if that lender is Tesla Financing Arm N.A.
It’s not a bet concerning whether or not Hertz has $3B cash on hand, it’s a bet if the lender thinks Hertz branding is good enough to pay the note. I would bet so.
Finally, there may well be a cross-collateralization with the Hertz family to make this deal pencil out.
If you've tried to rent a car lately, prices are sky high. I'm renting a very rough Nissan Frontier with 50,000 miles from Enterprise at the moment, that was the only car they had available. At some point in the last year, the rental car market made a binary flip going from Can't make money because no one is renting cars to Can't make money because we have no cars to rent! Tesla's risk here, even if they are lender as well, is very modest because the rental market is in a massive supply pit that may take 5 years to get out of.
Details will come forth but I would not be surprised if Tesla's terms were pretty harsh to Hertz, as in a profit sharing from Tesla rentals in exchange for ongoing tech support for making Teslas work on the rental market. So Tesla's upside could even far exceed the value of the car sold + financing terms.
To me this entirely seems like a marketing stunt and a last ditch effort. Looking at recent major wholesale orders of Tesla cars, Las Vegas' Tesla loop comes to mind.
A fleet of Tesla cars in a glorified cave taking tourists from point A to point B which was marketed to be a Boring company project with that concept video that blew everyone's mind off. It may as well be an underwhelming private transport facility that resembles a lazy river [0] being marketed as revolutionary public transport system [1].
Supposedly rental car companies keep their cars an average of 13 months and are constantly turning over their fleet. This order is over at least a year, so I imagined it's just that they will be buying Model 3's instead of whatever else. The advantage is their service costs and depreciation will be greatly reduced and they can keep the Tesla's 2-3x longer before needing to replace them. This should be a huge reduction in their costs. I would guess they buy their cars with debt anyway, so not like they need to plunk down $4b all at once.
In addition, the rental car companies sold more of their fleet than typical during the pandemic to help ride-out the large decrease in business. As travel continues to pick up they need to replenish their fleets anyway. Finally it isn't a great time to be buying cars in general, so the penalty of buying a Tesla vs another car is lower now than it typically would be.
The other price to wonder about is that of the rental vs ICE vehicles.
While I daily-drive an EV, I'm pretty sure I wouldn't want one for a rental just yet. Charging infrastructure isn't quite to the point that you can teleport to some random place and not need to think at all about anything. Tesla is closer to that than anybody else.
I also tend to just drive more when I'm traveling, and so the range limitations will be much more meaningful under those circumstances than normal. My Bolt gets me about 240-280 miles of real driving per charge and it's totally fine for everything I normally do.
Of course I applaud Hertz for supporting consumer choice in this regard. Different folks will have different needs on different trips, myself included.
American car makers dug themselves a hole because there were a few populations that would buy American cars no matter how bad they got: refugees from WWII (e.g. old Italians, Poles, Jews and Veterans who would never buy a German or Japanese car), police departments, and rental cars. In a case like that the Ralph Naders and the Consumer Reports can be pointing out how bad your product is but they can point to people who still buy it, cover their ears and sing "la la la".
In principle renting a car could be an experience like "I drove a Buick and I liked it" (happened once to me) but more often the vehicle has been trashed, things like the controls for the seat position are busted, etc.
Car rentals move some metal in the short term but they damage the brand in the long term.
Add to that thee fact that Teslas seem to have fit and finish issues that show up in under 10,000 miles, I expect a lot of people will have a negative first impression. Or maybe they won't because they expect rentals to be in bad shape?
No FSD, they are paying $42k per Model 3 which is “nicely appointed” not base models. FSD would add $10k per vehicle. They can always buy FSD later (although price is expected to keep going up). But presumably they are locked to the $42k price now over the next 14 months even if Tesla keeps increasing the price.
If only Hertz wasn't the worst of the car rental companies. My latest, and last horror story with them was that because they couldn't correlate my identity to that of the corporate credit card I was using, they were "unable to rent" to me.
I asked about refunding my pre-paid rental then, and started finding an Uber to Enterprise.
"Oh, sorry sir. Prepaid rentals are non-refundable."
Right, so you take my payment, and then decline to rent to me, and then refuse to refund me? They did, eventually.
All rental car agencies suck. So do all delivery services, airlines, cell phone carriers, and cable companies. Pick any company operating in these spaces and you’ll get stories of how they are the literally the worst company on the planet.
That being said I’ve never had a bad experience with national or enterprise. I dunno why other companies haven’t copied the Emerald Isle concept yet. It makes so much sense. The customer gets to feel like they had control over the car they picked, the time spent in line is non existent, etc. Its a win all around.
Also life pro tip: unless your employer can do better, always use Costco Travel for rental cars (and hotels for that matter). They always include multiple drivers, and have very competitive pricing… sometimes lower than what I can get using my employer’s corporate rate. The Costco membership almost always pays for itself just by renting a car for the week.
I only rent a car when going on holidays abroad for a week. There is no way I would choose Electric. Filling car once and forgeting about it is a must for me
I take from your comment that you probably haven’t driven an electric car. The whole point is that you plug it in where are you are staying. Every morning, you wake up to a fully charged up car.
You don’t drive to the charging station. Those are essentially for road trips.
I just checked the website of my go-to hotel in Florida, the Sheraton Sand Key (390 rooms), and they have precisely one charger. It is free, but that makes it even more unlikely it'd actually be available.
No doubt the charger situation is rapidly improving, but it seems there's still a long way to go to match the convenience of gas. Long charge times can be mitigated by "destination charging", but if a major hotel chain like the Sheraton only has a single charger at a tourist hot-spot location like Sand Key (by Clearwater), then it seems we've still got a ways to go.
All my travel is within Europe and I stay only in budget hotels. Everywhere I have been I have not seen convenient place to charge car. Actually I have seen electric cars even as cheaper option than traditional cars when renting. IMO it's a good option for a few days when you don't need to recharge. There are limited vacation days and I am not ready spend this time thinking about charging
My in-laws fancied a Tesla for their vacation in Austin TX. They could not even get to San Antonio, which is hardly an hour away. They had to switch it out for a regular car.
Tesla basically rides on their marketing propaganda. I'll stick to my 35mpg Toyota SUV thank you.
If a Tesla couldn't go 80 miles, there was something wrong with it (like, someone forgot to charge it), just like there would be something wrong with an ICE that couldn't make that same trip (like, someone forgot to put fuel in it). Hell, my ten year old Nissan Leaf could almost make that trip with ten years of battery degradation. So the Tesla either wasn't charged, or we're missing a key piece of the story.
You're right, I left some pieces out for brevity. To elaborate, they were not picking up the Tesla from Austin and started for San Antonio straight away. They were vacationing, and as all vacationers do, they went sightseeing, eating out etc. and by the time set off for San Antonio, were not sure if they'll make it, then charging was an issue. Multiple factors combined to convince them that the Tesla is no good when you don't have a plan.
I don't know nearly enough about electric cars, but I was under the impression their battery performance severely drops off in extreme heat and cold. On an extremely hot day (say 112F/44C) what is the maximum distance which you can traverse?
The older Tesla's do lose up to 30% range in the cold, but all the currently sold Teslas have heat pumps which largely fixed that problem. It's true that you won't get your rated range unless you're driving on the level and not going faster than 55, but you'll get more than enough range to get between Superchargers on road trips or to putter around town all day. If you want to putter around town all day and then leave for a road trip, you better super charge in between.
The numbers I’ve seen quoted are in the neighborhood of 20-30 percent, but that’s only really for cold weather. Tesla batteries are actively cooled, so there shouldn’t be a significant performance decrease other than the power draw from the AC unit in the cabin.
Even if there were a 50% loss in efficiency the car should still be able to travel over 150 miles, the notion that the weather would drop the range to less than 80 miles is absurd.
I don't know the answer, mainly because there would be a lot of variables starting with the battery pack option one purchased, but it will for sure be a considerably larger number than 80.
How strange. I routinely drive uninterrupted stretches of 160 miles in my Model Y without emptying the battery. Are you sure they weren't pressing the acceleration and break pedals at the same time?
