Summary
➡ Hertz has found that having many EVs is damaging their income. EVs have lots of damage and the repairs are very expensive. Because of this, Hertz plans to sell 20,000 EVs and buy cars with traditional engines instead.
➡ Hertz started selling these EVs last month. These sales will result in a non-cash charge of $245,000,000 on their fourth quarter.
➡ One reason the sales hurt Hertz is that Tesla reduced the prices of their EVs. This is good for buyers, but not so good for sellers like Hertz. They plan to use some of the money they get from selling the EVs to buy cars with traditional engines.
➡ Hertz mentioned that repairing EVs after accidents is very expensive. If an accident happens, insurance companies often ask for the whole battery pack to be replaced, which can cost as much as the car itself.
➡ The price of EVs has dropped a lot, especially for Tesla. This has caused large losses and difficulties for Hertz. This issue isn’t just with cars, but also buses and other forms of transport.
➡ Electric semi-truck makers face fires in their factories. One car fire used up 36,000 gallons of water, while normal car fires only need about 500 gallons. This is 72 times more water used. There are concerns about how green this is.
➡ After electric vehicles (EVs) fires are put out, there’s a risk they could start again. This has happened before when cars are taken to the junkyard or storage. This makes handling them akin to dealing with joke birthday candles that reignite.
➡ The smoke from burning electric cars creates dangerous gases like hydrogen fluoride and hydrogen chloride. Firefighters have to use special breathing tools to stay safe. CO2 gas, typically considered as a harmful gas, is seemingly harmless compared to these gases.
➡ The author questions if companies can get away with these environmental issues. They refer to past events like the 2020 pandemic and climate crisis, implying that companies have managed to evade responsibility before.
➡ During holiday time, a ship carrying lithium-ion battery cargo had a significant fire. It was not carrying cars, but batteries from Vietnam to California. They used CO2 to extinguish the fire successfully, seeing CO2 as a rescuer in this situation.
➡ The author criticises the general public’s reliance on science without questioning it. They imply this by urging people to wear masks, take vaccines, and not question the science behind it. This is a call for critical thinking and logic rather than blind faith in authority.
Transcript
Um, we got another big bus fire story here, as well as some other ones. But that’s not the main story. The main story is what is happening with Hertz. They jumped into evs in a big way just a couple years ago in 2020, 1 hz did a massive push. They said we, they put in an order for 100,000 Tesla Model three s. And of course, they’ve bought other brands, but, I mean, they jumped into it in a big way.
And now it looks like the evs are hurting Hertz bottom line, in a big way. By the way, thank you on rock Finn. Thank you, Stephen Patterson. Thank you, Stephen. That is very generous. And third day in a row that you have done that. Thank you so much. He says, here’s another hundred. Thanks for being sincere. Well, thank you, Steven. Really do appreciate your support. So they bought 100,000, just Tesla model three s, and again, other brands as well that they have, and they put in that order for that.
They took delivery of 50,000 and they’re going to dump now 20,000 of those and they’re going to replace them with internal combustion engine cars. Why? Well, the CEO of Hertz said evs are seeing a lot more damage than combustion engine cars and the cost to repair them is much higher. So they began dumping these 20,000 evs on the used car market last month and will be selling them throughout 2024.
The sales are expected to record a non cash charge in the fourth quarter of $245,000,000 related to incremental net depreciation expense. And this has really piled up because the used car market has gone soft, along with many other aspects of the economy. But it was really stoking for a while there, and now it has gone down significantly. And to make matters worse, Tesla drastically lowered prices on evs in order to compete with new companies that are coming online with their electric vehicles.
And so by marking down the price of a brand new one significantly and then a soft market, they are taking a beating. It really does hurt. Hurts. The company expects to reinvest a portion of the proceeds into the purchase of internal combustion engine vehicles to meet customer demand. As of last October, EVs were about 11% of their total fleet, with Tesla accounting for 80% of that, and again, selling them into a soft market.
But the repairs, what was it about the repairs? They said it’s not the maintenance cost that is costing them so much money. With Hertz, they said the maintenance cost of the electric vehicles is lower. But they said the collision repair and damage repair is astronomical. Of course, we’ve talked about this with Eric Peters many times. If there is a collision, in most cases, the insurance companies are going to demand that all the battery pack be replaced because they’re concerned that the impact might have damaged one or more battery components.
And if those things were to catch fire because of the damage, it’ll be a runaway thing and total the entire car, except the other side of it, is that if you have to buy replacement batteries, that can be about the cost of the car itself right there. If the car is depreciated a couple of years, it could very well be the case. Collision and damage repairs on an ev can often run about twice that associated with comparable combustion engine vehicle.
The difference is significant enough that it weighed significantly on our third quarter earnings. He says. There’s quite a bit of the cost element that relates to the Teslas as opposed to others. He said General Motors evs benefit from a larger parts and repair network nationally, and with lower parts and lower costs for repairs. One of the key things about Elon Musk is that he didn’t want to have a network of dealers.
And so now this is one thing that is helping some of his competitors. So the decline in the price of evs, especially Tesla’s steep price cuts recently over the course of 2023, driven primarily by Tesla, as compared with last year. Such a salvage price for these things has created larger losses and a much greater burden. They point out, well, it’s not just the electric cars there, but it’s also the buses.
And I’ve talked about how these public buses, because the governments who are pushing and demanding electric vehicles everywhere, they were real big about jumping into buses. And so in France, I remember showing pictures of these things just spontaneously combusting. And they got rid of their electric vehicles. In Germany, they had multiple electric vehicle fires at different depots. One of them, they had one in Stuttgart. I think it was the one in Stuttgart where it burned down all the buses and the bus station, because it caught fire.
One of them caught fire spread to all the different buses. And so Germany has pulled back from that. Even in Canada, in one jurisdiction at least, they decided that these buses were not performing well for them between the fires and between the cold weather performance. So they converted them to diesel. And of course, as I mentioned before, you had Lala Harris and Biden, and I’ve shown the picture of it.
I even put the who’s magic bus behind it as she’s talking and giggling about how much she loves yellow buses. And now they’re even better. They’re all electric. And then the company shut down just like these wind companies were shutting down because it made absolutely no sense. Well, now in London they have an electric double decker bus bursting into flames suddenly wasn’t even vaccinated. It was just injected with subsidies to the extent, I guess, that it bursts into flames.
But during rush hour in London, and this is the way it was described, clouds of smoke billowed. Wait a minute. In London they had clouds of billowing smoke. Sadiq Khan has taxed these people to death. He’s put cameras everywhere. You move that vehicle, you’re going to get hit with a 15 pound fine or something like that. This thing is billowing smoke and going on for a long time.
Zero emissions, my eye. And it’s not carbon dioxide. Oh, this is battery smoke. But I’m sure that burning batteries smoke is not nearly as harmful as co2, don’t you think? All smoke is not created equal. And I’m sure they’re not worried about burning evs. They’re just worried about co2. Your meat, your dairy, your breath, all the rest of the stuff. I don’t know what plants do with burning battery smoke.
Three fire engines and 15 firefighters raced to the scene with dramatic photographs showing the blaze destroying the rear of the bus. Blew out the back windows. One resident said, we heard a huge bang and we were terrified as an explosion. And especially when you’re in London, people are wondering what’s going to, is it a terrorist attack? I remember when we were in London, we came out of a performance where they’re on our honeymoon and there was a big explosion.
There’s been a lot of talk about IRA terrorism and things like that. And everybody was like, is the bomb? Is the bomb? And it wasn’t a bomb. It was something like a transformer that blew but really scared everybody there on edge. There’s about 1000 of these electric buses now across London. Daily skeptic, regular contributor said, I took that bus, the number 200, every day as a kid in the 1960s through Wimbledon.
And I’ll tell you, it never burst into flames in the 1960s. And then in a separate story, the Daily Mail reports, the grief Turkin, mother of a model who was killed in an ebike battery fire in the London flat, has called for a blanket ban on ebikes. And this is a real big issue. I think there was more than 150 of these fires in New York City. People will take these electric bikes and they’ll park them in the lobby of an apartment building or something like that and they’ll catch fire.
As they’re being charged or something and burn it down. They’ve had about 150 people who have been killed. Let me take that back. I’m not sure if it’s 150 people or 150 fires. Quite a few of them, though. Anyway, she was 21 years old, died when the blaze caused by a converted ebike battery ripped through the flat on New Year’s Day, 2023. So about a year ago in Alabama, firefighters had to pour 36,000 gallons of water on a single burning car.
That’s why I say when you look at these buses, they’re much bigger. We’ve gone from the ebikes that can burn down apartment building and kill people and have done so frequently in the big cities. You scale it up from that. And, of course, going back a few years ago, we had the Samsung phones. When they first came out, they were having a lot of battery fires, for whatever reason, very dangerous.
They were getting worried about people taking them on planes, even. And then you scale it up to a laptop, then you scale it up to an ebike. Then you scale it up to a car. Then you scale it up to a bus. Then you scale it up, as they’re trying to do with the semi trucks. And one of these ev semi truck manufacturers has already had more than three fires at their factory.
And so this is just a car, but it required 36,000 gallons of water. Well, what does it take to normally put out a fire? A normal fire in an internal combustion car only takes about 500 gallons. This took 36,000. So that’s 72 times of the amount of water. How environmentally friendly is that? And then, of course, as they point out, these evs, once you get the fire put out, you don’t know if it’s going to reignite.
And that’s happened many times. As they take them to the junkyard or where they store them, they reignite. Several days later, they might do it two or three times. They’re like a joke birthday candle as you blow out, and it reignites. Got to drown them in water and leave them in water, just like you do those joke birthday candles. And then we talked before about the fire, about the smoke.
Right. I’m sure that the smoke is not nearly as harmful as co2. Oh, yes, it is. As they point out, the smoke from these burning electric cars produces hydrogen fluoride and hydrogen chloride gases. Both of them are toxic to breathe. And so the firefighters have to wear breathing apparatus when they’re putting out this fire. That takes 72 times the amount of water that a normal car fire would actually, I prefer harmless co2 gas, don’t you? That is what the insanity of this stuff is, just beyond belief.
And that’s why, when I look at this, it’s like, could they ever get away with something like the natural asset companies? Well, of course they could. Look at what they’ve gotten away with, with the environmental stuff, with the climate. Macguffin. Look at what they got away with all of 2020, with the pandemic. Macguffin. Of course they can get away with this. And then, I wasn’t here when this happened, but during the holidays time between Christmas and New Year’s, there was a major lithiumion battery fire course on a cargo ship off of Alaska.
They finally got it put out on January the first. And this was not carrying cars. We’ve had these situations in the past. First one of these that we saw, it was a ship that was carrying cars. A lot of very expensive luxury supercars, hypercars, millions of dollars on these cars, along with a lot of other new cars coming from Europe. And then electric cars and their electric cars caught fire, and it spread to other electric cars, and they could never get it put out.
And so many millions, tens of millions of dollars of damage just in the cars. But it burned the entire ship down. I believe that they had a major one of these after that as well. I think there’s been two of those, but at least one of them, this one, was just batteries. Cargo ship carrying ion batteries from Vietnam to San Diego, California, alerted the US coast guard of a fire in the hold to prevent an explosion.
And listen, this. This is the key thing why I wanted to cover this. To prevent the explosion, they pumped co2 into the hole and sealed it. Co2 saved them from the battery fires. Isn’t that great? We got to have lithiumion batteries and electric cars to save us from the co2. But the co2 saved the ship. They used it to put out the fire. Boy, things have come full circle, haven’t they? Recycled, reused.
So then they were not sure if it’s going to start up again, so they had to. After they finally got it put off by using co2. Co2 to the rescue. They parked it a couple of miles offshore to ensure that the fire and what toxic gases, not the co2, but the battery lithium smoke, was not going to affect the nearby community. Holiday show is a critical thinking super spreader.
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