Brian McCowan, Zondits staff, 8/1/2022
There is, perhaps, no clearer sign that the transition to EVs is rapidly progressing than the fact that the rental car industry is jumping in with all four wheels. Hertz, Avis, and Enterprise are all making significant fleet purchases of 100% electric vehicles, as well as hybrid cars.
Zondits recognizes several positive aspects to this market progress:
- Rental EVs will encourage more lodging chains to install charging systems and link those to the room charges.
- Potential purchasers of EVs will have the opportunity to rent vehicles in order to “try before you buy.”
- Fleet sales will help the EV industry ramp up production resulting in improvement in economies of scale.
- Public confidence in EVs will be bolstered by the willingness of rental car giants to enter the market.
- Rental fleets turn over quickly and low mileage used EVs will soon reach the market.
In what is the largest deal to date, Hertz has committed to a $4.2 billion deal to purchase 100,000 Tesla EVs by the end of the year. One factor that portends to moderate the transition is the constrictions of automotive industry supply chains. Sharky Laguana, president of the American Car Rental Association, puts it this way, “the initial problem is just getting your hands on the damn things.” The rental car industry purchases about 10% of global automobile production, but supply chain issues contributed to a greater than 50% reduction in purchases in 2021.
Another issue concerning the industry is the training of maintenance personnel. However, studies have demonstrated that EVs require less maintenance than gasoline-powered cars, and beyond the powertrain, EVs differ little from their gasoline counterparts.