On May 20, it was reported by Reuters that multiple price cuts by Tesla have led to increasing dissatisfaction among European car rental companies.
The rapid depreciation in the value of Tesla cars due to these price reductions has resulted in rental companies failing to achieve expected returns when selling the vehicles after the rental period ends.
Richard Knubben, Director General of Leaseurope, an association representing rental companies in 31 countries, stated, “Nothing is worse for fleet buyers than the continuous depreciation of assets.”
He highlighted that sudden price drops undermine the residual value of rental vehicles, causing financial losses for rental companies.
Additionally, rental companies are frustrated with Tesla’s slow and costly after-sales service.
Some companies have complained about the slow repair times and high cost of parts, making Tesla maintenance three times more expensive than the industry average, according to Lorna McAtear, Fleet Manager at the UK’s National Grid.
To address these concerns, Tesla has introduced measures such as providing discounts and attempting to improve after-sales service.
Since mid-2023, Tesla has offered quarterly discounts of up to 2,000 euros (approximately 15,737 RMB) on Model 3 and Model Y purchases for rental companies.
However, Knubben responded, “The residual value of Tesla drops too quickly; I’m not sure if the discounts are sufficient.”
Tesla’s unusual policy to offer favorable terms to rental companies appears to be driven by competition from other brands.
Bart Beckers, Deputy CEO of French car rental company Arval, noted that new challengers, particularly Chinese electric vehicle manufacturers, are focusing on maintaining strong resale values to avoid Tesla’s mistakes.
Fleet managers and rental company executives indicated that with Chinese competitor BYD entering the European market with more cost-effective electric vehicle models, rental companies are reducing their reliance on Tesla.
Traditional automakers like Volkswagen and BMW are also producing increasingly competitive electric vehicles.
McAtear mentioned that the UK’s National Grid, which owns 2,000 cars including over 500 Teslas, plans to remove Teslas from its fleet unless these issues are resolved.
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