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Hertz orders 100k Teslas

bloomberg.com

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Re: Hertz orders 100k Teslas

#511

Post by degrews »

I'm not surprised! Everyone is talking about the technical suitability of EVs as rental cars. But I don't think that's the main motivation.

On Turo (like Airbnb for cars), Teslas are unique in how disproportionately expensive they are relative to their purchase value. When I last checked, a Tesla Model 3 worth 50K would rent for up to $200/day. Compare that to a comparable $50K BMW which might rent for $80. I imagine the reason is that people just want to rent a Tesla to see what all the hype is about.

Also, rental companies only keep their cars for about a year, so this situation doesn't have to last long for it to be profitable for Hertz.

Re: Hertz orders 100k Teslas

#512

Post by [deleted] »

kragen wrote: post #490
jonathankoren wrote: post #455

Earlier quoted context omitted.

I've already addressed sales. It was trading at 161x future earnings before this deal. That's an insane multiple. As far as summing up dealerships, let's go! Tesla has 438 stores worldwide . Toyota has 1500 dealerships in the United States alone. GM? 4500 in the United States. Do you honestly think that if we summed up all the Toyota dealerships in the world, it would be worth $750 billion? I don't, but that's how mu…

Agreed about 161 years, though I'm not sure how you can say "161x future earnings"; we don't know what the future earnings are, because they're in the future. I presume you mean "161x current [annual] earnings". Generally I'd expect service and repairs to be of the same order of magnitude as sales, because if you have to spend $5000 a year to service and repair a $20000 car, you'll probably junk it and buy a new car…

[deleted]

Re: Hertz orders 100k Teslas

#513

Post by acchow »

kragen wrote: post #490
jonathankoren wrote: post #455

Earlier quoted context omitted.

I've already addressed sales. It was trading at 161x future earnings before this deal. That's an insane multiple. As far as summing up dealerships, let's go! Tesla has 438 stores worldwide . Toyota has 1500 dealerships in the United States alone. GM? 4500 in the United States. Do you honestly think that if we summed up all the Toyota dealerships in the world, it would be worth $750 billion? I don't, but that's how mu…

Agreed about 161 years, though I'm not sure how you can say "161x future earnings"; we don't know what the future earnings are, because they're in the future. I presume you mean "161x current [annual] earnings". Generally I'd expect service and repairs to be of the same order of magnitude as sales, because if you have to spend $5000 a year to service and repair a $20000 car, you'll probably junk it and buy a new car…

There are 16,708 car dealerships in the US. You claim the total market cap of these dealerships is $1.5tn? For a value of $90M per dealership?

Autonation is a publicly traded network of car dealerships. Market cap of $7.9bn for 545 locations. That's $14.5M per location.

Re: Hertz orders 100k Teslas

#514

Post by ethagknight »

greatgib wrote: post #339
ethagknight wrote: post #136

Earlier quoted context omitted.

I think you are thinking about it wrong. A lender will happily lend $3B discounted slightly because the loan is secured by… $4B worth of Teslas thanks to that bulk purchase discount. Now, imagine if that lender is Tesla Financing Arm N.A. It’s not a bet concerning whether or not Hertz has $3B cash on hand, it’s a bet if the lender thinks Hertz branding is good enough to pay the note. I would bet so. Finally, there ma…

This is close to what I think could be a possibility. In financial reports of Tesla, there are more and more cars that are "leased" by Tesla, and maybe they are thinking of "outsourcing" that to Hertz. But still, Hertz is not so financially solid, and one has to remember that a car, as an asset, loose value very fast on the after market.

If you've tried to rent a car lately, prices are sky high. I'm renting a very rough Nissan Frontier with 50,000 miles from Enterprise at the moment, that was the only car they had available. At some point in the last year, the rental car market made a binary flip going from Can't make money because no one is renting cars to Can't make money because we have no cars to rent! Tesla's risk here, even if they are lender as well, is very modest because the rental market is in a massive supply pit that may take 5 years to get out of.

Details will come forth but I would not be surprised if Tesla's terms were pretty harsh to Hertz, as in a profit sharing from Tesla rentals in exchange for ongoing tech support for making Teslas work on the rental market. So Tesla's upside could even far exceed the value of the car sold + financing terms.

Re: Hertz orders 100k Teslas

#515

Post by yardie »

garaetjjte wrote: post #445
yardie wrote: post #57

Earlier quoted context omitted.

My ICE car is $50-$70 to fill the tank (26gal/100l) from empty to full. And gets me 450-500 miles. So I'm a tad bit jealous, just not enough to take on a car payment.

Wow, that's cheap fuel. I pay equivalent of 70$ to fill my car with 45 l. On the other hand, I also get 500 miles from it...

It's closer to $75-85 since gas prices have gone up. But at $2200/year for fuel still cheaper than a Tesla payment.

Re: Hertz orders 100k Teslas

#516

Post by cinntaile »

vineyardmike wrote: post #491
cinntaile wrote: post #442

Earlier quoted context omitted.

What part of their market cap is unrealized tech dreams and what part is substance, in the traditional value investor sense, in your opinion?

>unrealized tech dreams and what part is substance, in the traditional value investor sense Companies like Tesla are not for traditional value investors. Bonds and boring stocks or ETFs serve that purpose.

That's just evading the question.
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