Looking for positives & negatives

We continue to look for positive and negative indicators showing the overall cost and long-term picture for EVs. Resale values, repair costs and the implications of lithium batteries are a developing story.

POSITIVE REUSE & RECYCLE

While there are claims that only 5 per cent of EV lithium batteries are being recycled (and it is true that they are banned from EU landfill), it is true that some are being repurposed for other, less demanding uses.

For example, Kia Australia has turned to Australian company Infinitev to repurpose and recycle batteries when they’re too tired to run its EVs. The crucial moment is when an EV battery falls to less than 80 per cent of its charging capacity (and is out of warranty) — but it could have a second, more domestic life, of another 10 years or more, if there is the capacity to deconstruct the car and repurpose it.

An Infinitev company statement says that the strategic partnership with Kia Australia aims to “significantly reform the way electric vehicle batteries are reused, repurposed and recycled”.

It explains: “We partner with the automotive industry to create a circular economy for EV batteries. First, we aim to reuse batteries in their original application like hybrid batteries. Second, if we cannot reuse batteries, we repurpose them for new applications like energy storage. Finally, when batteries reach end of life, we recycle them to recover valuable materials that are used to make new batteries.”

+ BYD has just made its 7 millionth “new energy” vehicle, a Denza N7. It was unveiled at BYD’s Jinan factory in China.

+ The Electric Vehicle Council this week endorsed the Federal Government’s New Vehicle Efficiency Standard as a big step forwards for Australia.

NEGATIVE RISING REPAIR COSTS

But another indicator into the current picture with EVs has come with the global head of Hertz stepping down amid huge losses for the rental car giant, which has recently hit the brakes on plans to expand its EV offerings amid rising costs.

Stephen Scherr announced he would vacate his role as Hertz CEO and leave the rental car company’s board on April 1. Mr Scherr took on the role in February 2022, almost two years after the company filed for bankruptcy in the US and Canada in the first months of the global pandemic.

He soon sought to deliver on the company’s plans to bolster its US fleet with at least 25 per cent EVs by 2025, which had been set in motion in late 2021 when Hertz made an order for 100,000 Tesla EVs in the US.

This order was made at the list price of the cars, not at a discounted rate, as is common between rental companies and carmakers.

Under Mr Scherr’s leadership, Hertz signed a deal reportedly worth $US3 billion ($4.62b) with Chinese-owned carmaker Polestar for 65,000 of its EVs by 2027 for the company’s US fleet.

Rising repair costs for EVs compared to traditional petrol and diesel cars soon began to impact Hertz, while flagging demand for battery-powered vehicles in the wider market affected resale values.

Hertz announced it would sell 20,000 EVs from its US fleet due to rising depreciation and repair costs in January 2024, and later asked Polestar to waive its EV supply contract last month — a request which the carmaker agreed to on the condition that Hertz wouldn’t offload its EVs at a significantly lower price or too soon.

The cancellation of the Polestar deal followed reports late last year that Hertz had received just 35,000 of the 100,000 Teslas it had ordered two years earlier.

Previous reports have pointed to Hertz being vulnerable to market conditions as it purchases the cars on its fleet outright, rather than the more traditional practice of having an option to sell its vehicles back to manufacturers for a set price.

Over the past year, Hertz’s share price has dropped from $US19.36 to $US7.49 on the Nasdaq.

Gil West, former chief operating officer of General Motors’ autonomous taxi firm Cruise, will take over as Hertz CEO.

with Jordan Mulach