Hertz is dumping EVs but the decline in the price of used Teslas started long before that.
$2 Billion in Subsidies, Only 2 EV Stations Opened
On January 18, I commented $2 Billion in Subsidies, Only 2 EV Stations Opened, the Holdup is Social Justice
In yet another example of Biden incompetence, the administration is setting up rules making it harder to deliver EV charging stations.
I also stated “EVs are more expensive.” Reader Robert replied ….
I think to be fair, your analysis should also consider EVs resale value. Everything I have read indicates that EVs have extremely strong resale value, beating almost all gasoline powered vehicles except maybe Porsche.
This is the real reason Hertz is selling its used Teslas now, to sell them now when their resale value is at a premium so Hertz can plow that money back into its business.
Right?
Right? Uh … No!
Hertz Is Selling 20,000 EVs Due to Lack of Customer Demand
On January 11, I noted Hertz Is Selling 20,000 EVs Due to Lack of Customer Demand
Hertz is selling a third of its EVs globally, with 20,000 in the US and will use some of the money to buy more Internal Combustion Engine (ICE) gasoline-powered cars.
Add that to the list of inconvenient facts.
Hertz Deals
Want a used Tesla? You can find them at Hertz Car Sales.
Hertz is selling some Tesla Model 3 for as low as about $20,000, about half the purchase price for the cheapest variant of the compact sedan.
Hertz will log a $245 million incremental net depreciation charge.
Only 6 Percent in the US want an EV for their Next Vehicle
Prices are plunging because Only 6 Percent in the US want an EV for their Next Vehicle and the damn things are stacking up on dealer lots and rental car agencies who bet on EVs made a stupid mistake.
Prices were plunging long before Hertz started dumping.
Ford Loses $36,000 on Each EV, Cuts Production of Electric Trucks
In case you missed it, please see Ford Loses $36,000 on Each EV, Cuts Production of Electric Trucks
Demand for EVs is nowhere close to projections so car makers are slashing production.
hahahahahaahahahahaha you made this clown eat his vomit!!!
I think to be fair, your analysis should also consider EVs resale value. Everything I have read indicates that EVs have extremely strong resale value, beating almost all gasoline powered vehicles except maybe Porsche.
This is the real reason Hertz is selling its used Teslas now, to sell them now when their resale value is at a premium so Hertz can plow that money back into its business.
Right?
With all the EV bashing and problems they with have cold weather I wonder when Tesla will be valued like other car companies, or are tax incentives keeping it afloat?
Cant sell them or rent them=junk.
I’ve been saying for a long time all the mfg’s need to get together and disobey biden’s crap and tell those clowns to go get stuffed.
Git on it Virgil… I’ll hold yer beer.
“Average Price of Used Tesla Declines 18 Straight Months”
And i still can’t afford it.
This is what happens when politics and ideology takes over careful, profits based business decisions. You get squandered resources, and illogical, stupid outcomes. Why would people think politicians know anything about science, the economy or doing the right thing? Politicians are liars and grifters, period.
Tesla is quite profitable, even without gov’t cheese.
The rest of the big auto manufacturers, not so much.
Not for long given the plunging resale values. Only a moron buys one after looking at that
Resale value is declining as the EV evolves from a status symbol to a schmuck symbol.
This schmuck likes paying 5 cents a mile to get around, but to each their own.
Have you done the math on how much more you will lose when you sell your vehicle?
Mish has also posted data on how much more it costs to fix these pieces of crap that are rated at the bottom for reliability on Consumer Reports etc.
Like the higher insurance costs?
hahaha rejoice for you are saving the world — right?
You do know that most electricity is produced from fossil fuels and nuclear – or maybe you thought the power came from fairy farts
Hilarious stuff mate – keep it up
There was a general decline from April 2019 to April 2021. That’s how far back the used EV market started to crater. The 18 month surge that followed was clearly due to COVID production distortions and government handouts. Now that production has resumed and handouts stopped, prices have resumed their natural, long term, downward trajectory.
When the idiots get wind of this — and most will only find out when they go to sell cuz they only read fan boy bullshit about Tesla — the sales of new EVs and prices of used ones will implode hahaha
CarMax is facing a shortage of Tesla’s on there lots. I just bought a new Model Y and CarMax gave me $3500 over Kelley Bue Book for my 2021 with 77k miles. Car was pre-sold to buyer waiting for a used Tesla. The correct context is to compare the resale value of a Y to a BMW X3 and model 3.to a 3 series BMW. Teslas typically cost less new and sell for a lot more used.
Great
CarMax can buy 20,000 vehicles from Hertz
Hah-You nailed it Mike.
So you are telling us there is still quite a few morons out there willing to get sizzled on buying an EV?
I wouldn’t advertise my mistakes
Looking at the Hertz Tesla’s, most have over 90k miles.
Hertz typically sells gas cars when they have 60-70k miles.
The nobody that didn’t rent the Teslas sure drove a lot.
These price declines are mostly because of Tesla lowering the prices of their new cars. Some people would say that finding efficiencies and passing savings to customers is mostly a good thing, but yeah it sucks for resale values.
Cars depreciate rapidly! Film at 11!
The Hertz Teslas were used as Ubers. Hertz had a deal with Uber where their drivers could rent the car, get a discounted charge and drive it all day. That’s why they have crazy miles and why if you have been using Uber you will have noticed a lot of Teslas picking you up.
Hertz began an Uber program with their Teslas because nobody wanted to rent them for normal use.
You missed the part where the Tesla lose value considerably faster than ICE vehicles.
You should re-read the article
When considering whether to buy a used EV, mileage isn’t necessarily the most important factor, said Jeremy Robb, senior director of economic and industry insights at Cox Automotive. More important is the quality of the battery and the tires, which can wear out more quickly than in gas-powered cars.
“Almost 60% of [an electric vehicle’s] value is tied up in a battery, and batteries degrade with use,” Tucker said.
That’s why Tucker recommended having a vehicle you’re considering inspected by an independent mechanic or technician – and one who understands EVs.
You’ll want to get the tires checked, too, because EVs weigh more than gas-powered cars and need special tires that can handle the wear. That’s because EV batteries are much heavier than a traditional gasoline-powered engine.
One of the reasons Hertz is selling off so many EVs is the high cost of repairs. For EVs, repairs after an accident can cost thousands of dollars more than their gas-powered counterparts – something else that potential buyers may want to consider.
The basics of used-car buying
link to morningstar.com
“A sucker is born every day”. Mr FreeMarket Elmo loads up on govt subsidies and then dumps his rolling batteries on the suckers who end up holding the bag. Adequate charging network, battery replacement (and disposal$$$) are all unsolved wildcards.
Some people (Robert) when confronted with facts that contradict their feelings make up their own facts.
Mish, do you have an data on the average price of used ICE vehicles over this same period of time? It might be interesting to see the two data sets (ice vs ev) side by side.
My brother works for Cox automotive, and told me used car prices had the same pattern as the prices of EV’s.
At 15K Tesla model 1 might cannibalize models 3, Y and X. Model X, Y and 3 are already down. X deflated the most dragging Ilan with it.
The poor are getting hit by high inflation. The rich are deflating. SF and Tel-Aviv apartment prices and rent are down. In Lebanon the cost of food and rent is up due to the Hooties event and influx of refugees from the south. The Mexican gangs are making billions. In Rafa the mafioso families are making millions. They are smuggling weapons in, into Gaza, paid by Qatar, and refugees out from Gaza with family members as collateral, spreading radical Islam and paying 50% annual interest on a never ending debt.
Walter White and Marty Byrde would here been better off if they had listened to a Peter Schiff podcast along the way.
Is this a proper comparison – ie 2-years-old car then and a 2-years-old now? As the average age naturally increases, so the resale price drops. Back in 2019 there were far fewer 2-years-old Teslas than today.
However, I get the point.
True. Quite obviously so…..
I think the idea is to point out that the BEV-fanboi truism “resale is better on BEVs” is just not so; now that the BEV and ICE fleet ages are moving closer to parity (still not nearly there, but the trends don’t support the “BEVs inherently depreciate less” thesis.
Our small town (pop 16K) finally activated 4 level 2 charging stations (total 13 charging ports) after being idle for a year. The town did take advantage of several state and federal subsidies. A 1 hour charge will cost $8. I can buy a used Tesla 3 (70K miles) from Hertz for $22K. I can get a $4K tax credit. We don’t do a lot of long distance traveling so this seems like a pretty good deal. The main thing I worry about is the cost of replacing the battery.
The Hertz Teslas have been driven *hard*, perhaps even more so than a typical ICE rental car. So they are priced low for a reason – they’re thrashed.
No doubt the batteries are trashed from using fast chargers repeatedly.
Looks like you get about 30 miles for every hour of charge off a level 2 charger. Does that sound right? Mileage-wise that would be twice as much as I currently pay for gas on my car now.
In 2020 Hertz went bankrupt, sold their fleet, restructured and then when demand came back counted on a boom of ride-shares using EVs so they bought a lot of Teslas at the top of the market. That market turned out weaker than expected and Hertz found out that they had over-ordered EVs and now have to rebalance their car park to match the market better.
Maintenace costs were as low as the expected but the accident costs were higher than expected principally because the car part market for Tesla is still underdeveloped because well, it’s a new product. To make it worse for them, Tesla started aggressively cutting the prices of their cars after Hertz bought theirs so of course the price of used Teslas dropped also. That is just back luck for Hertz that compounded the initial bad decision of over-ordering. One last thing, the other car rental companies were more prudent in their decisions on EVs so they don’t have the same imbalance as Hertz.
For Tesla, this isn’t much of a negative. The price of their cars have been dropping steadily so they are becoming more and more affordable. At the same time their sales have soared so they are still making money while all the others are losing their shirts with each EV sale. One thing I do like is that Tesla’s sales numbers last year show that their market is no longer the Greens buying it for ecological reasons. Musk is no longer loved by that part of the population which wasn’t that big to begin with and that has not hurt Tesla’s sales at all and I wonder if by going more to the Right, Musk has opened a much larger market for his cars.
look a little deeper into Tesla Stock price and financials. They are NOT profitable without the Carbon Credit offset (scam)
Hmmm. On that graph I see a straight line down from 60k to 35k $. With a anomalous bubble peaking in the summer of 2022.
Bubbles happen. No big whoop.
And, given that all Teslas are pretty new (hey, my jalopy is nearly 20, so, yeah, all Teslas are new), it doesn’t seem remarkable that the overall used price tanked. Going forward, I’d expect that number to flatten out as the temporal pipeline fills.
But, then, pricing for any jewelry/status-symbol is, ah, subject to change, isn’t it?
As the cultists see their values implode they will continue to implode as nobody with any sense will buy a used one. Which will mean nobody with any sense will buy a new one. Except the very very stupid
Might the cost of second hand EVs dropping be due, in part at least, to their average age and mileage increasing?
I believe it’s age/mileage weighted
Tesla closed the Berlin plant for two weeks bc of the “Hooties shortages”. Options #1 : Skip on Cape of Good Hope. Tail, shadow, COSCO container ships that sail in the red sea to Piraeus. Use NATO as insurance instead of the greedy insurance co. Option #2 : unload in Dubai or Bahrain ports. Trucks through the Saudi Arabia & Jordan. From Haifa’s Shanghai SIPG terminal, which is empty, straight to Italty. In 25/20 days instead of 60 .
Over time, the Cape is a preferred solution for most bulk traffic. You get an initial hickup of a few weeks. But afterwards, things are much more fundamentally reliable. As is the case in Panama, the various “powers” (and not-so ‘powers’) with various degrees of control over the Suez route, will iterate towards capturing most of the savings, either way. And you’ll forever be stuck with uncertainty. The energy cost of the longer trip can, to at least a decent extent, be made up for by building even bigger classes of ships, once freed of the current de-facto constraint of commissioning to be viable for Suez.
A Chinese naval base on the border between Israel and Gaza, perhaps reaching all the way inland to the West Bank, could make the Suez route more resilient against the vagaries inherent to being situated in the Suez region. The Chinese would keep it open, as well as general tensions down, more reliably.
But most Chinese shippers and exporters, who are the ones ultimately shipping the most through Suez, don’t view the Cape, as long as everyone is affected equally, as a major problem. Ditto the Japanese. It’s the East Med countries and ports which have the most to lose.
TSLA market cap is $670B. Ilan owns 13% ==> $90B. CA rob the poor and the middle class at the pump under the banner of climate change. CA taxes are double than those in TX and Louisiana. CA wealthy bought Tesla. How can u lose. The middle class bought peeEV to save money, paying thousands of extras. The poor bought 5Y/15Y crumbs. The collapse of the used Tesla bubble from 70K to 35K indicates that it will take decades until ev will be a viable option. Most innovations disruptive co start at the bottom, appealing to different types of customers, before moving up. Bentz “Smart” flopped.
There’s more blood to come. I wonder how many Tesla’s are leased? Hertz’s dumping of Tesla’s and Musk’s rampant price cutting has to be impacting the lease market.
Lessees are locked into their payments but the residual value at the end of the lease for a Tesla might be quite a bit less than originally calculated, which could hurt the lessor big time.
For lessees that had intended to buy the car at the end of the lease, they probably would not do so in the current market as it would be cheaper to buy a used one.
Or have a stronger negotiating point with the lessor. Why take a chance on an unknown used car vs the condition of the present car driven from day 1?
But there isn’t as much to go bad on an EV compared to an IC, outside of the EV battery.
How do you learn your lesson so that you never buy another EV?
You buy a Tesla and drive it for a year
I have contended with many on the value of EVs and their future. Like so many other mentally conditioned brains on subjects from climate to DEI, their bias is driven by a religion-like and emotional magnet. You can’t get through their bias barriers; they won’t consider any hard facts. Maybe the value of their EVs will wake up the woke.
Value of an EV, like most assets, is only of concern at two points – when you are buying or selling.
Why would anyone buy an EV to begin with?
Do ya’ll think you are saving the world?
Where do you think the electricity comes from?
Very true, and it’s becoming very strange. Most stay in thier echo chambers and when they do venture out thier conversations devovle into silly arguing matches held on social media. Being right is paramount.
I enjoying being proved wrong. I celebrate if that happens and I change my mind – which ultimately means I am always right!
I don’t understand why these EV Cultists don’t follow my lead.
They insist on getting clobbered when the repair or sell their EVs and they are in no way at all helping the environment.
“Liberals knows a lot of things that just aren’t so.” -Reagan
Don’t forget to mention those ‘Safe and Effective’ vaccines that the clown world shot in exchange for a donut