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Alex Ossola: Welcome to Tech News Briefing. It’s Friday, January 12th. I’m Alex Ossola for The Wall Street Journal. On today’s show, after making a big bet on Tesla, rental car company, Hertz has announced that it’s cutting a third of the electric vehicles in its fleet. What does this say about consumer demand for EVs? WSJ Reporter Ben Glickman joins us to discuss. And then the big electronics show known as CES wraps up today. Among the thousands of vendors and cool gadgets, one big theme has emerged, 2024 is the year of AI. We’ll hear about some of the tech standouts from Google, Belkin, and more from WSJ Personal Tech News Editor Shara Tibken. But first, in 2021 rental car company Hertz makes a big play. It bought 100,000 Teslas, turbocharging its own EV offerings and boosting Tesla’s valuation. Now, just a few years later, the company has announced that it will sell off a third of that fleet and it’s walked back some of its promises on EVs. Joining me now with more is WSJ Reporter Ben Glickman. Ben, give me a little background on Hertz’s decision.
Ben Glickman: So Hertz and Tesla initially reached a deal for Hertz to acquire 100,000 vehicles in October 2021, and that was a type of bet on the EV transition and how it would affect those downstream industries like car rental. It sent Tesla shares significantly higher, sending the company to a $1 trillion valuation for the first time. And generally, Hertz has been looking to electrify its fleet beyond that purchased with Tesla, they offer electrified offerings from other car companies as well, and they’ve acknowledged that there are some growing pains with that kind of switch, such as with the charging networks and with customers being uncomfortable with that.
Alex Ossola: Okay. So this was a pretty big bet for both Hertz and Tesla. Why is Hertz selling off these cars and why is it doing it now?
Ben Glickman: So there have been a lot of problems with the rollout. I would say that immediately Hertz said that it was selling enough of these cars basically because there was not demand. They say that they want a better balance, supply, and demand for their electric vehicles. Another interesting tidbit here is that it’s going to use some of the proceeds of this sale to buy internal combustion engines. So gas-powered cars again to meet demand. So reading between the lines there, they’re saying customers who are using Hertz don’t want as many EVs as we have to offer them. And then there are separately all these other issues that have come up with Hertz. For example, there’s a charging network issue where customers don’t know where the charging is. Just generally for electric vehicles in the United States, there’s still a lot of buildings going on around EV charging infrastructure. They are also really expensive to repair for Hertz. They tend to come with lower margins because of that and when the cars get damaged, which as you can imagine with rental cars is not a small problem, they can be very expensive to repair. So that’s been sorting of weighing on Hertz as it’s been seeking to make this transition. And this was formalizing what Hertz has been indicating all along. In fact Hertz recently walked back its prior commitment to a target of one-quarter of its fleet being electric vehicles by the end of 2024, due to some of these issues, and said instead that it was looking to match demand for electric vehicles with what it had been on hand.
Alex Ossola: So what is Hertz’s plan now when it comes to EVs?
Ben Glickman: Yeah, so Hertz is not backing off entirely from electric vehicles. They’re eliminating one-third of the fleet, so two-thirds are still there and they’re going to try to focus on profitability for the remaining fleet. That includes investing in charging infrastructure. Another thing they said they’re going to do is to negotiate more affordable access to parts and labor with EV companies. They said they’re going to do address this demand issue. They said in a filing with this news that they’re looking to implement policies and educational tools that make EV renting basically more enjoyable and easier for customers.
Alex Ossola: How is Hertz expecting things to change, looking towards the future?
Ben Glickman: First of all, things are going to get cheaper on the EV side. Part of this is that the relative newness of EVs in the US car market means that services that are well established for internal combustion engine vehicles simply don’t exist yet for electric cars. And that’s going to improve with time as adoption continues and the infrastructure gets built out.
Alex Ossola: That was WSJ Reporter Ben Glickman. Coming up, AI is turning up in some unexpected gadgets. We’ll find out about some of the latest technology after the break. This week, an estimated 130,000 people descended on Las Vegas for the annual CES trade show. Companies like Garmin, GE, and LG showed off the gadgets they think could shape the future. And AI was the star of the show. We should note that WSJ did not attend in person this year, but we’ve been following along remotely. Our personal tech team has put together a list of some of their favorite innovations. WSJ Personal Tech News Editor Shara Tibken joins us with more. Shara, what is different about CES this year?
Shara Tibken: CES has bounced back a little bit from the worst days of the pandemic, but it doesn’t have quite the same following that it used to have several years ago. And we’ve also seen the focus areas shift a little bit. So we’ve really seen the show turn into more of an auto show than maybe a gadget show. There are still TVs there. There are still computers, but a lot of the products are less personal tech than they used to be. Also, this year everyone is talking about AI.
Alex Ossola: Okay, well let’s get into some specifics. Tell me about some of the cars that were at CES this year.
Shara Tibken: Yes, so it’s fun to see the futuristic sort of things that people are looking at. Obviously, a big thing was generative AI, voice assistance in cars. We saw that from VW, from BMW, being able to have more of a conversation with the assistant or ask them questions about your car, or we’ll have to see what this is actually really like in practice. Clemson made this kind of off-road rescue vehicle. It’s autonomous. It kind of looks like a little tank and it can go into disaster areas to scope out what’s happening, or to deliver supplies, or to act as a portable power station. So the idea is that it can go places where normal people can’t and normal vehicles cannot go. Google also has some news, so the infotainment system at the front of your car, you’ll now be able to access the Chrome browser.
Alex Ossola: I feel like any time we talk about personal tech, there’s always something for phones. What kind of phone things did we see this year?
Shara Tibken: Belkin, which makes a lot of accessories for mobile devices, has a new stand that basically you attach your iPhone to it, so it connects there with MagSafe. So the magnet’s built into the newer iPhones and you can turn on the camera and it will follow you as you move. We also saw a new case for iPhones that gives you a keyboard that looks a lot like a BlackBerry keyboard of a million years ago. So it extends the keyboard below your device so you don’t have to take up part of the screen with the virtual keyboard.
Alex Ossola: Ah, what a throwback. How about some of the tech that’s intended for safety?
Shara Tibken: One of the things we like, Phillips has a new door lock that uses your palm to recognize it. So not just fingerprints, or having to type in any sort of code. SABER, which makes pepper spray has a smart pepper spray device, so it connects to your phone via Bluetooth and if you deploy the pepper spray, it sends an alert to your trusted contacts that you designated in the app and also tracks your location. So if you’re in trouble, if you’re at the point where you actually need to use pepper spray, and make sure that the important people in your life know about it.
Alex Ossola: Okay. Turning to something a little more lighthearted. Any products that we’re just saying are for fun?
Shara Tibken: That’s a lot of what CES is. One thing we really liked, Bird Buddy has created a pretty popular birdhouse that takes pictures and videos of the birds that visit and identifies them using AI. So that’s actually AI that is working. And it has a new concept accessory that is a new perch that will identify individual birds. So you could know if, say Charlie the Cardinal comes every morning and it will identify him and let you know like, “Hey, Charlie’s at the bird feeder.” And it can also track him across their broader network. So you could see like, “Oh, Charlie is in Arizona right now.” And it’ll let you know when he’s back. So we don’t know if this is going to actually come out and be a real product, but it’s an interesting kind of fun thing. Another product that is a real product is GE has an indoor smoker, so you can put this on your countertop. You can put in different kinds of meats like brisket, pork ribs, what have you, and it uses a filtration system to turn the smoke into warm air. So your whole apartment isn’t this smoky mess. Also, there’s a pillow that automatically adjusts the positioning of your head if you’re snoring, it will lift the head, or lower the head, or whatever to make the noise stop.
Alex Ossola: That was our Personal Tech News Editor Shara Tibken. And that’s it for Tech News Briefing. Today’s show was produced by Julie Chang. I’m your host, Alex Ossola. Our supervising producer is Katherine Milsop. Our development producer is Aisha El-Muslim. Scott Saloway and Chris Zinsli are the deputy editors. And Philana Patterson is The Wall Street Journal’s head of news audio. Stay tuned this afternoon for TNB Tech Minute. Thanks for listening.