Rental EVs likely to be entry point for future customers

Despite widespread electric vehicle buzz, studies show most Americans have never been EV passengers, let alone drivers.

Their most likely first experience? A rental car, said Gregory Scott, spokesperson for the American Car Rental Association.

Car rental companies are committing to sustainable mobility, Scott said. It’s an important statement, as the American Car Rental Association’s members purchase 1 in 10 new light vehicles sold in the U.S. each year. Car rental companies’ overall commitment signals the future of mobility and provides demand for automakers as they ramp up EV efforts, Scott said.

Hertz Corp. has committed to EVs in a big way and boasts the largest rental EV fleet in North America. The rental car company has agreed to buy 175,000 EVs from General Motors over the next five years, 100,000 from Tesla and 65,000 from Polestar. Hertz has also joined oil giant BP to build a network of U.S. charging stations. It expects the effort to build out the country’s EV infrastructure will spur EV rentals. Hertz plans for a quarter of its fleet to be electric by the end of 2024.

EV rental demand is healthy and on pace with Hertz’s expectations, said Laura Smith, Hertz executive vice president for sales, marketing and customer experience. Consumer feedback has been “extremely positive” around the globe, she said.

“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.

The American Car Rental Association’s Scott said a consumer’s decision to rent an EV rests on a few issues, including their range anxiety and knowledge of charging infrastructure. For business and leisure renters alike, travel needs such as driving long distances may deter a renter from an EV.

Rental car companies also face hurdles. A lack of charging options can leave rental car companies grappling with how to turn over EVs from one customer to another, Scott said. Do they ask the customer to return it fully charged or risk making the next customer wait? Rental car companies are facing these hypothetical situations but need more data to come to objective conclusions about their effects, Scott said.

The American Car Rental Association is advocating for Congress and the Department of Transportation to focus on the electrification of car rental facilities, including consolidated rental facilities at publicly owned airports, with existing federal funds for EV programs, as well as the 2023 reauthorization of legislation for the Federal Aviation Administration.

Hertz has developed in-depth EV content on its website and provides a user guide that EV renters can review before picking up the car, Smith said. The company has heavily invested in staff training to serve the EV customer, she said.

Hertz EVs are priced comparably to per-day rates for combustion vehicles, Smith said, adding that as the EV fleet grows, a broader range of models and price points will be available.

With most EVs spoken for before they get to the dealership lot—or gone soon after— it can be hard even to get a test drive, said Chris Harto, senior policy analyst of transportation and energy at Consumer Reports.

“It’s hard to get that firsthand experience, but rental cars give that option,” Harto said.

An early 2022 study evaluating exposure to electric vehicles found only 2 percent of Americans have an EV, according to Consumer Reports. Between early 2021 and 2022, only 17 percent of Americans said they had been a passenger in an EV and just 7 percent had driven an EV.

Some drivers try an EV and then decide they don’t like it, Harto said.

Rental car companies must explain EV processes such as charging and provide price comparisons to similar gasoline-powered rentals to help consumers decide if they want to rent an electric vehicle, Harto said.

Rental fleets’ interest in EVs will help the adoption of the technology, Harto said. Rental companies’ purchases will also build a steady used-vehicle market for people looking to save money on an EV, he said.