Posted on 03/23/2024 9:10:43 AM PDT by george76
The Biden administration’s Environmental Protection Agency (EPA) has revealed its ambition: to phase out gas-powered cars in favor of electric vehicles (EVs). Incredibly, this announcement comes as we are flooded with overwhelming evidence that EVs are a market loser.
Indeed, the artificial boom and then meltdown of the EV market is a modern industrial calamity. It was created by government, social media, wild disease frenzy, far-flung thinking, and the irrational chasing of utopia, followed by a rude awakening by facts and reality.
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.
Looking back, however, Scherr’s decision to bet everything on an EV boom was a disaster that was highly praised at the time. Only last year, the company bragged: “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’re here to help our customers electrify their travels.”
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.
Again, I’m not knocking some uses for EVs. If you think of them as enclosed and souped up golf carts, you get the idea. They can be wonderful for certain urban environments so long as you don’t overuse them and have to get them repaired. You also have to be in a financial position to afford the higher costs all around, from financing to insurance to repairs and tires. And you have to be prepared to take a big loss on resale, if you can even manage to find a buyer.
There is money to be made in this market, as there is with any niche good or service. But that is covered with normal market conditions, not massive subsidies, mandates, and frenzies. The Hertz case proves it. It is a perfect clinical trial of these machines. We now know the answer. They cannot work.
And thank goodness because if the United States truly switched over in a big way from gas to electric, we would face other disasters. The wear and tear on roads is much worse due to the sheer weight of the cars, which is 25 percent higher than gas cars on average. Many parking garages would have to be rebuilt with new reinforcements.
Then there is the strain on the grid. There is no way the industry could handle the demand. Brownouts and travel restrictions would be essential. All this would pave the way toward 15-minute cities.
Please remember how this craze began. It was lockdown time and automakers suspended orders for parts and chips. They stopped cranking out cars. When demand intensified, the chip makers had moved on to other things, so delays escalated. By the summer of 2021, there was a general panic about a growing car shortage.
At that point, consumers were willing to buy anything on the lot, among which EVs. The sales records were completely misinterpreted. The manufacturers made huge investments, and the car rental companies did too. But the product had not really been tested. That test is taking place now, and the EVs are completely failing.
We keep hearing that this is still too early, that development has a long way to go, that more charging stations are coming, that manufacturers are going to overcome all these problems in time. All of this sounds very similar to what the producers of mRNA shots say: this was just a trial run and they will get better the next time.
Maybe but doubtful. There is a huge problem in the investment market right now. EVs are massive losers. Consumers, manufacturers, car rental companies, and every other market in which these lemons are made available are running away from them as fast as possible. They had their day in the sun and got fried.
There is another problem: surveillance. The car can be tracked anywhere and shut off at a moment’s notice. This is obviously a great thing if the government desires a social-credit system of citizens control.
At this point, it is doubtful that the industry can recover. And yet, even now, the Biden administration is planning more subsidies, more mandates, more restrictions on gas cars, and digging themselves even deeper into this hole.
“The Biden administration on Wednesday issued one of the most significant climate regulations in the nation’s history, a rule designed to ensure that the majority of new passenger cars and light trucks sold in the United States are all-electric or hybrids by 2032,” reports the New York Times.
You simply cannot make up nuttier stuff. At some point, we could see manufacturers making the cars just to satisfy the central planners but otherwise preparing to chop them up and throw them out. They would likely be happy to dump them in the ocean but that isn’t allowed either.
No one is talking about what is going to replace the Federal and State gas tax? You got it. A per mile charge as they track your every movement.
The ability of a seasoned executive or manager to accept mandated nonsense with enthusiasm while slow-walking it into oblivion is a beautiful thing to watch. It takes a very smart person to let something dumb ferment knee deep in group-think until it’s no longer popular.
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.
_________________________________________________
Everything the government/leftist touch turns to sh*t!
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.
_________________________________________________
Everything the government/leftist touch turns to sh*t!
When I was in NM, one of our vendors paid a visit, and one of the two guys was from Scotland and he wanted to see the western US.
They had a rented car a did a 2500 mile loop over 3 days.
“... they are fine for urban commutes with home chargers...”
Electric Golf Carts have performed well for decades.
They already are.
In order to satisfy the ridiculous CAFE requirements, they bought out all the golf card producers and declared the golf cards EV’s.
Once, there were adds for a free golf card. With all the subsidies and EV requirements, a simple golf card could be sold for free!
But it is not enough any more. The EPA requirements have been raised several times, so car manufacturers are forced into EV’s with disastrous results.
The stupid woke policies of corporate DEI really Hertz the bottom line, soto speak.
Corporate America decided to pursue the political favor of the global wannabe feudal lord Leftazis rather than customer favor. The venture into Woke lunacy has borne a putrid fruit when it slammed into bitter reality. It would be funny if not so pathetic and harmful to a lotta good folks who are just trying to make a living.
Yes, the large stock of electric cars, particularly Tesla vehicles, contributed to Hertz’s financial challenges and decision to sell off a significant portion of its electric fleet. The high costs associated with collision and damage repairs, as well as the rapid depreciation of electric vehicles (EVs) due to price declines in the new car market, led to a substantial loss for Hertz. The company faced difficulties with repair costs, depreciation, and lower resale values for its used EV rental cars, ultimately impacting its profitability. Additionally, the dominance of Tesla in Hertz’s EV fleet played a significant role in these challenges, with Tesla vehicles making up about 80% of Hertz’s EVs and being a major factor in the decision to reduce the electric fleet
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The issue with the Deep State / Uniparty is they only care about what they want. What normal people want is not only not considered, they could not care less about it.
With EVs, the Deep State / Unipaty has passed their “rule” and they truly believe that they can just wait us out. So what if we don’t buy their mandated EVs? The rules are in place and they have no interest in changing them. There next move will likely be a combination of: mandate the disuse of older vehicles, restrict the availability of gasoline, ration the amount of gasoline individuals can purchase, greatly increase gasoline / diesel taxes.
All of the moves will be to force the disuse of personal transportation. Therefore, choices in the 2030s will quickly boil down to discontinue use of personal motorized transportation and therefore be forced to move to an urban location or pay up for a useless EV and try to continue living outside of urban centers but with sharply limited transportation.
Once gasoline and diesel are generally unavailable, the long knives will be out for the toxic and environmentally highly dirty EVs. That will be done to try and force the remaining holdouts off their land and into the urban free fire zones.
It’s not Hertz’s fault that their customer base rebels against change.
(pretty much what the EV types think)
Was it Woody Allen who said, "I took a speed reading course and read War and Peace in two hours. It was about Russia."
Think about the size of the electrical substation that would be required in the rental co’s back lots to get ready for the morning rush.
When politics overrules market forces, disaster is sure to follow.
Politicians have abdicated their duty of oversight on regulatory agencies. Politicians today have little on their agenda other than make the other side look bad and keep their seat. How about you twits doing something useful for the American public instead of those things designed to get you reelected?
I read the comments, and none mentioned the aside the author said, comparing the EV hysteria to the mRNA hysteria. In both the government is way behind where the rest of us are.
I’m thinking the car-rental business should be a major cash spinner. Only a truly arrogant and stupid CEO could screw it up.
they have key, irreplaceable real-estate at airports and such
they can mass buy cheap, standardized cars, probably on very good terms. When cars are not needed (as we saw in Covid) they can easily liquidate basic models
enterprise management operating software is highly standardized
Every customer must guarantee payment with credit card - no credit risk
they can flex to enormous fees during high-demand periods
they can add in all kinds of hidden charges, like airlines do
Americans increasingly can’t afford to own, so they rent instead. From Airbnb to car-shares, the “lease economy” is real thing
Hertz Stephen Scherr has found a nice corner office at Ford.
Great term for them although I think of them as ego-tards.
Hopefully this puts other CEO’s on notice. Be more careful.
This decision was made during the high of ‘everyone is going EV’ mentality - the automakers were moving their strategies to EV’s, Tesla was riding high, etc..
Then it all fell off a cliff. None of them considered their customers. For Hertz, it’s particularly baffling. A car rental is very simple for the customer, I want to pick one up like fast food - as fast and painless as possible, a good experience, and done when I need. Keeping the vehicle going needs to be also as painless as possible. I don’t care about it. It’s temporary. Now you’ve made it a hassle, I’ll go with somebody else.
The automakers saw the success Tesla was having and tried to follow. Except they also didn’t stop to understand the customer base. Many Tesla customers are feel-good liberals that think they’re saving the planet, have well-paying jobs, and consider it ‘status’. There’s only so many of them. The average Joe doesn’t care less, they don’t want the hassle. Give them a reliable fuel efficient vehicle (because gas is expensive) and they’re happy. When gas is cheap they’ll buy muscle cars - and be happier.
Dictating to your customers is never a good idea. It’s also another great example of government interference in the market, centralized decision making (aka dictating).
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