According to foreign media reports, currently Tesla We are trying to appease some European car rental enterprises, because the company has repeatedly lowered the retail price of cars, which has led to a sharp drop in the value of Tesla cars purchased by rental enterprises. In addition, Tesla's slow service speed and high maintenance costs also made its corporate customers dissatisfied.

Foreign media interviewed 9 executives from major car rental companies and more than a dozen managers of enterprise fleets. These respondents said that Tesla's remedies include offering unofficial discounts to enterprises who buy new cars when there are stocks, and trying to solve the service, maintenance and ordering complaints that have always been prevalent. In the past few years, Corporate fleet managers and rental companies have complained that Tesla has ignored these issues.

Tesla's goal is to further stimulate its sales in the context of weak global demand for electric vehicles and increasingly fierce competition (especially from BYD and other Chinese electric vehicle manufacturers). However, Tesla's price cuts hurt its fleet customers. In Europe, fleet customers are Tesla's largest consumer group, and fleet procurement accounts for nearly half of the company's sales in Europe.

Leasing companies buy new cars and rent them out to their customers. When setting the lease price, these companies will consider how much the residual value of the vehicle remains at the end of the lease term. A sudden drop in the price of new cars will seriously affect the residual value of rental cars, thus causing losses to rental companies.

Lease Europe, headquartered in Brussels, is a car rental and rental industry organization in Europe, representing a group of 31 countries. Richard Knubben, the director general of the organization, said: "Nothing is worse than the continuous decline in the asset value of fleet buyers."

Image source: Tesla

Knubben said: "Tesla is actively sending a message to our members: 'We can offer you discounts and compensation.' But the residual value of Tesla's vehicles has declined too fast, and I'm not sure whether the discounts they offer are enough." Tesla did not immediately respond to the request for comment.

The decline in the value of Tesla's used cars and the tension between Tesla and fleet customers are well known, but the damage control actions taken by Tesla to solve these problems have not been reported before.

An executive of a large car rental company in Europe who did not want to be named said that since the middle of 2023, Tesla has purchased Model 3 (Configuration |Inquiry) and Model Y (Configuration |Inquiry) An unofficial end of quarter discount is offered, up to 2000 euros ($2134) if these vehicles are in stock. He also revealed that Tesla has been offering such discounts to leasing companies since the end of last year.

Tim Albertsen, CEO of Ayvens, Europe's largest car rental company, said that Tesla's services had improved, but the decline in resale value still caused damage. He said: "Tesla has understood this and is introducing solutions that will help us solve this problem."

Albertsen declined to specify what measures Tesla has taken to reduce Ayvens' losses on electric vehicles.

Arval, a car rental company under BNP Paribas, is currently negotiating with three Chinese car manufacturers to purchase electric vehicles after suffering losses due to the decline in the value of Tesla cars. When Tesla began to cut prices last year, Bart Beckers, Deputy CEO of Arval, said, "You are really throwing stones at your feet."

Becker revealed that Arval's fleet has a total of 1.7 million vehicles, of which about 170000 are electric vehicles. He said that Tesla was trying to solve the problem of repair and maintenance, but he also added that Tesla's "new challenger" (the Chinese electric vehicle manufacturer) seemed to be trying to avoid the mistakes made by Tesla, focusing on maintaining the resale value of vehicles.

Tesla does face the resale value problem of car rental companies. Hertz has been selling Tesla used cars for leasing in the US market, while German competitor Sixt has stopped buying Tesla cars. When asked about the impact of Tesla's new car price cut, Sixt said that the reduction of the residual value of Tesla and other brands of electric vehicles reduced their profits by 40 million euros (42.7 million dollars) in 2023.

In the car market of all countries, fleet customers are very important, especially in Europe, because European enterprises usually rent a large number of company cars for employees, partly because these countries have relevant tax relief policies. According to the data of market research organization Dataforce, last year in the UK and 15 EU countries, rental and car rental companies bought 44% of Tesla's total sales in Europe.

However, in the first quarter of this year, Tesla's fleet sales in these countries fell by 2.3% year on year, while the overall rental market sales in Europe increased by 3.5%. Although Tesla's fleet sales in Europe have declined, in these markets, the company's business share from short - and long-term car rental enterprises has increased to 49%.

Tesla's global sales and profits also declined after a long period of substantial growth. The company reported that its global delivery fell by 8.5% in the first quarter of this year, the first decline in four years.

Until recently, Tesla had a first mover advantage in the European market, that is, European corporate customers had little choice in trying to achieve internal climate goals or EU emissions goals through electric vehicles.

However, the situation is changing rapidly. According to fleet managers and leasing company executives, Chinese automakers, including BYD, are introducing lower cost electric vehicles into Europe and actively seeking Tesla's corporate customers. Traditional car companies such as Volkswagen and BMW are also producing more and more competitive electric vehicles.

Foreign media interviews with more than a dozen enterprise fleet managers show that Tesla's slow and expensive repair and maintenance services are another pain point for European leasing companies and their customers. Most of the respondents refused to reveal their identities because they were actively seeking solutions to their problems with Tesla.

The interviewee revealed that the maintenance time of Tesla cars is too long and the cost is far higher than other vehicles. Part of the reason for this phenomenon is that Tesla parts are expensive.

Although there are many problems, some fleet customers are satisfied with Tesla's vehicles and services.

Octopus Electric Vehicles is the car rental department of Octopus Energy, a British energy company. There are about 15000 electric vehicles in the company's fleet, of which about 5000 are Tesla. Fiona Howarth, its CEO, said that as a pioneer of electric vehicles, Tesla needs time to explore its service operation mode, while electric vehicles produced by traditional automobile enterprises are also facing similar challenges. She said that during the pandemic, the value of Tesla used cars was artificially raised, and now it needs to go through a process of decline. Howarth said, "We have a good cooperative relationship with Tesla."

Lorna McAtear, fleet manager of National Grid, a British energy company, described her more troubled relationship with Tesla. She has been collecting data on maintenance costs and found that Tesla's maintenance costs are three times the industry average.

McAtear revealed that Tesla's other problems include cumbersome ordering system and defects in the arrival of cars. For example, she said that some electric vehicles delivered by Tesla had the problem of windshield warping, but the company refused to repair it within the warranty period.

National Grid has a fleet of 2000 cars, of which more than 500 are Tesla. McAtear said that unless the problem is solved, she has planned to recommend that the company withdraw Tesla from the team. At the same time, Tesla's main competitor BYD has begun to deliver cars to National Grid.

McAtear revealed that she promoted face-to-face talks with Tesla representatives in mid April this year. At that meeting, Tesla promised to improve service and repair the ordering system. Tesla also promised to hold more meetings in the future to provide a "roadmap" to resolve outstanding issues, which made McAtear feel that "we finally have customer service from Tesla".

McAtear said that Tesla had been slow to respond before. She said: "For many years, our team has been unable to communicate with Tesla, and this frustration has been piling up in our hearts."

(This article is from Gasgoo)