Rental companies' investment in EVs is driving demand.
It's difficult to justify spending a big chunk of change on a new electric car if you're not sure what it will be like, which is why many Americans are getting their first taste of an EV through rental. While manufacturers continue to develop EV technology, electric vehicles are only getting more expensive, and as demand for EVs continues to rise, EV sales still occupy a small chunk of overall vehicle sales in America. According to studies, most Americans have never even experienced a ride in an EV car. Vehicles such as the Chevrolet Bolt are making EVs more accessible to the average Joe, but according to Gregory Scott, spokesperson for the American Car Rental Association, the car rental market is where most get to experience their first electric ride, reports Automotive News.
The car rental industry is a massive driver of car sales in the US, with one in every 10 new light vehicles being sold going to rental fleets across the nation. With the electric tide sweeping the planet, car rental companies are also electrifying their fleets, and large organizations such as Hertz are committing massive sums of money to electrify their fleets. Hertz has recently agreed to buy 175,000 EVs from General Motors over the next five years, with a further 100,000 coming from Tesla and 65,000 from Polestar. Hertz has also joined forces with oil giant BP to build an extensive charging network in the US and plans for a quarter of its fleet to be electric by the end of 2024.
According to Laura Smith, Hertz executive vice president for sales, marketing, and customer experience, EV rental demand is climbing, and consumer feedback on EV rentals has been overwhelmingly positive.
"When new vehicles are delivered to the marketplace by any OEM, the renting experience offers consumers an opportunity to test drive a new model, and I think this is further pronounced for EVs because the experience is so different for many consumers trying to figure out if it will fit with their lifestyle," Smith said.
However, Scott says that range anxiety and lack of knowledge of charging infrastructure keep some from hiring an EV car on holiday or business trips. On the flip side, rental companies still need help with charging network availability, and issues arise when companies need to return EVs from one customer to the next. Asking customers to return cars fully charged seems unreasonable, but making new customers wait is also bad for business.
The American Car Rental Association is pushing Congress and the Department of Transportation for improved electrification of major public facilities such as airports and is continuously pushing down its EV rental prices to the point where the per-day rates of EVs are comparable to those of combustion vehicles. According to a Consumer Reports study, only 2% of Americans have an EV, and between 2021 and 2022, 7% of Americans said they had been a passenger in an EV, and 7% had driven an EV. These figures are still extremely low, and it's up to rental companies to expose first-time users and, more importantly, educate them on proper EV usage. As an added benefit, second-hand rental fleet EVs will provide a steady flow of used EVs to a market that is significantly price-sensitive due to the current economic outlook.