Going Green Gave Hertz A Whole Lot of Hurts
Less than a year ago, on March 31, 2023 to be exact, the folks at Hertz, the rental car company, were crowing about going green with EVs as this story from then indicates:
The Biden-Harris Administration has recognized Hertz as a key company moving fleet electrification forward, reports a Hertz Tweet.
“This morning, Hertz was recognized by The White House for our efforts to expand access to electric vehicles across the country. Demand for EV rentals is growing and we are here to help our customers electrify their travels,” the Tweet proclaimed.
Hertz forecasts nearly 2 million EV rentals in 2023, approximately five times the number in 2022, according to a White House Fact Sheet announcing public and private sector investments for affordable EVs.
“The company plans to extend the electric vehicle experience to leisure and business travelers and rideshare drivers across the company,” reported the White House Fact Sheet on the Administration’s Investing in America Agenda.
The recognition follows Hertz EV expansions in two key markets in March.
Hertz Electrifies Denver will bring 5,200 rental EVs to the city, install public charging infrastructure, and expand EV education and training opportunities. Denver is the first city entering the new public-private initiative with Hertz.
Hertz Electrifies Houston will bring 2,100 rental EVs to Houston, nearly tripling its existing EV fleet in the city. In partnership with bp pulse, Hertz will also support the installation of a large, EV fast-charging hub at the Hertz location in Houston Hobby Airport.
Hertz plans to expand its electrification efforts to cities across the country.
“Hertz is investing in the largest electric vehicle rental fleet in North America and as part of that effort, we are committed to helping communities tap into the economic and environmental benefits of electrification," said Hertz CEO Stephen Scherr in a press release.
So, how has it all worked out? Well, one of our readers sent me an article authored by Jeff Tucker of the Brownstone Institute, who also writes at the Epoch Times, tells us:
CEO of Hertz Stephen Scherr has been booted out due to a vast purchase of an EV fleet that consumers didn’t even want to rent. The company has now been forced to sell them at a deep discount and in a market where consumers are not particularly interested…
Pleasing the Biden administration is not the same as pleasing consumers.
The demand turned south fast in a real-world test of drivers. But that’s not all. Hertz could not make their investment pay no matter what they did.
The key issues with EVs are as follows.
The cost upfront is much higher.
Financing charges are higher.
They depreciate at a higher rate than internal combustion cars.
The insurance is more expensive, by at least 25 percent.
Repairs are much more expensive, if you can get them done at all, and take longer.
Tires are more expensive and don’t last as long because the car is so heavy.
Refueling is not easy and missteps here can have nightmarish consequences.
They are more likely to catch fire.
Any motor vehicle accident that impacts the battery can lead to repairs higher than the value of the car, that is totaled with so much as a scratch.
To top it all over, there is no longer any financial advantage to the driver. It now costs slightly more to charge under many conditions than to refuel with gasoline.
The novelty of driving one for a day wears off after the first day. At first they seem like the greatest thing that ever happened, like an iPhone with wheels. That’s great but then the problems crop up and people start to realize that they are fine for urban commutes with home chargers and not much else.
They make truly terrible rentals. Obviously, under rental conditions, people have to use charging stations rather than a charger in the garage. That means spending part of your vacation figuring out where to find one.
Not all are superchargers, and if it is a regular charger, you are looking at an overnight wait. If you do find a station with fast chargers, you might have to wait in line. They might not work. You waste hours doing this. And you likely have to reroute your trip even to find a station without any certainty that you will get a spot with a functioning charger.
No one wants to do this. When you rent a car, all you want is a car that goes the distance. And typically car rentals are for going some distance else you would just take a taxi or a Lyft from the airport. You might need to drive several hours. And god forbid that this takes place in cold weather because that can reduce your mileage by half. Your whole trip will be ruined.
Why in the world would anyone want to rent one of these things rather than a gas-powered car? You might be better off with a horse and carriage.
Did Hertz think of any of this before they spent $250M on a fleet? Nope. They were just doing the fashionable thing.
That pretty well sums it up, doesn't? Going green hurts, even if you’re Hertz. But, how did Hertz make such an incredibly diastrous decision? Did they fall for the hype? Seems unlikely. You don't get to be CEO of such an outfit without marketing and research departments that could have told Scheer what Jeff Tucker points out.
Was it government pressure? Well, that's a possibility but surely Scherr understood his first responsbility was to stockholders and that Biden pleasing needed to be limited to a tiny initiative that ensured risks were minimized even as the company sought to appease the White House.
No, I suspect Scherr fell victim to the same pride that fells so many of us. I am given to thinking he followed the example set by the head of Anheuser-Busch when he decided to go PC and destroy the Bud Light brand. They both sought the peer approval of the elite circles in which they moved.
That's what the World Economic Forum is all about, after all. Jetting into Davos and being part of the CEO set is the culmination of a drive for respect at the highest levels and that means one needs to live up to the expectations of fellow elites, even if it means jetisoning customers. Indeed, a CEO must demonstrate they're so far above their customers that they can afford to do so. It's a potlatch ceremony where CEOs show much of their company they're willing to destroy to command plaudits from other elites.
So much of the corporate world operates in this way, which is why so much of it is corporatist rather than capitalist today. Once you accept the idea of pay to play or going green to please, it's only natural that traditional methods of generating profits fade to the background and grifting opportunities take precendence and soon become your MO. Sadly, though, it makes you blind to reality. And, once you've told your customers to sod off and are left to the whims and stupidity of politics and bureaucratic planners, well…you know.
#EVs #Hertz #Green #CarRentals #GoingGreen
Hat Tip: D.S.
Go woke, go broke
I rented an electric car ONCE and I will NEVER do it again. EVER. Terrible experience.
Hertz and other outlets can virtue signal as much as they want. It doesn't matter if customers aren't happy.