Rental Company EV Failure Hertz Our Resale Values

Recently, I was watching some videos about Equinox EV charging performance and wondered whether it would make a good replacement for my Bolt EUV. Not only could I get more range, but faster charging of 100–150 kW instead of only 55 kW. Considering that I like to do stupid things like use the Bolt to haul a trailer across the United States, having better range (of around 150–180 miles towing) and spending less time at charging stations would be very beneficial.

But, it didn’t take me long to see that I really can’t do that right now.

I actually got a decent deal on my Bolt EUV. Not only were there GM discounts at the time that lowered the price, but I also managed to pick up some additional discounts and keep the dealer from jacking the price up above MSRP (and this was in 2022, when everyone was doing that). Paying less to begin with is a good way to avoid being “underwater,” or owing more on a car than it’s worth.

But, the other side of the loan-to-value equation (value) didn’t go very well at all since purchase. Not only did GM make the discounts permanent for the following model year, but the company then discontinued the model. Many of the Bolts were also sold to rental car companies, which both rented them out to private renters and by the week to people doing rideshare and delivery driving.

Sadly, the rental car business didn’t go well. Because there aren’t charging stations on practically every corner and interstate exit the way gas stations are, people renting EVs need some basic knowledge to get the most out of the vehicles. When people don’t get that little bit of extra training and guidance, they can end up stranded on the side of the road or stuck at EV charging stations having no idea what to do to get charged up.

On top of problems with Tesla service and repairability, companies like Hertz have been backing out of the EV rental market. This, in turn, leads to great deals on used (even if heavily used) EVs, like this Model 3 that’s selling for a compelling price:

The mass number of used Bolt EUVs entering the market have resulted in values for that model going down as well, with the cheapest used Hertz EUVs going for less than $15,000!

I have a much better version of the EUV, with the Premiere trim, leather seats, front and rear seat heaters, adaptive cruise, and other goodies. But, with the base price of the EUV getting dragged down by Hertz’ failure to implement a good rental program followed by dumping them onto the market en masse, the little bit of value added by premium features doesn’t mean that much, and my vehicle’s value has been likewise drug down a lot faster than most.

It’s not a huge deal, as I can simply hang onto the Bolt EUV for a few more years, make some extra payments, and then not be underwater. Used Equinoxes and other models will also depreciate, giving me a chance to upgrade sooner without putting in a huge down payment. But my inability to upgrade to something that would better suit my charging needs is pretty frustrating. This frustration is likely shared by many other owners who would like to move on to something else.

It’s not all doom and gloom, though. My pain is other people’s gain in this case. People who can only afford a $15,000 EV now have the opportunity to get one that’s a lot better than a busted, worn out LEAF with 50–100 miles of range. 55 kW charging sucks for towing on the interstates, but for people who want a reliable grocery getter and commuter, that’s going to be a bargain.

The same is true for even more capable EVs, like Model 3s and Kias. It’s going to suck for people who want to upgrade to something else only to find that the vehicle isn’t worth what they expected, but for people trying to pick up a decent used Tesla for $20,000, we’re going to see people get a decent vehicle for a pretty affordable price. So, in the long run, people will benefit a lot from access to cheaper used EVs.

What I’d Really Like To See Happen Here

While it’s too late to protect the EV market from people being underwater, it’s not too late to protect future owners from getting into this position.

Ideally, I’d like to see rental car companies do a better job of renting EVs to people who don’t know much about EVs. I’ve written about this before, so I won’t go into it much here, but in short, education is key. Telling people what to expect on the highway, how to navigate to charging stations, what apps to use, and how to avoid problems is deeply important. This can make EV rentals flourish instead of setting people up for failure followed by disinterest in both buying EVs and renting them again.

We also need to see much better charging infrastructure for EV rentals to succeed instead of spreading the pain around and Hertzing our resale values. When the NEVI program wraps up in a decade or so, we’ll see stations every 50 miles along most highways. This will mean less planning and more seamless driving. This, in turn, alleviates but doesn’t entirely eliminate the need for education and training.

Ultimately, though, we really need to get to the point where EV charging stations are about as common as gas stations along all highways. As I learned on a recent trip, stations need to be spaced as close as possible for every car to go its maximums speed along highways. The 10–60% sweet spot, where EVs can charge at their full speed on most every stop, is key. But, the miles between stops to achieve that 10–60% stride varies with every EV model, and also by speed, tires, load carried, towing, etc. The only way everyone can maximize efficiency is to have stations every 10–20 miles.

This won’t be easy, to both educate and build infrastructure, but it will be possible for EV rentals to be a net benefit for EV adoption instead of a pain point.

Featured image by Jennifer Sensiba.