If someone would like to try out what it’s like to drive an electric vehicle, renting can be an affordable solution. But soon it will be much harder to find one.
Electric vehicles have been financially disastrous for rental companies, with Hertz abandoning plans to buy 100,000 Teslas in January after the cars’ resale value fell more quickly than the company expected. Hertz’s experience had a chilling effect on the industry, and many car rental companies are now trying to sell electric vehicles at deep discounts. And it may be a while before they start buying again. Last year, more than 4 percent of cars sold by manufacturers to rental companies were electric, according to S&P Global Mobility, and so far this year that figure is only 1.4 percent.
“The influence of rental companies in reshaping consumer behavior and promoting acceptance is of critical importance.” “But we still have a long way to go,” said Stephanie Valdez-Streaty, director of industry knowledge at Cox Automotive. According to Valdez-Streaty, rental companies were offering good deals on electric vehicles not too long ago, but those are unlikely to last as companies thin out their fleets of such cars to offer customers profitably.The rental complexes at the airport are usually not prepared for how well electric cars accelerate, and some companies have found that they cannot get spare parts as quickly for such cars as petrol cars.
“They thought electric cars would be simpler, simpler and cheaper to maintain,” said Karl Brauer, senior analyst at iSeeCars.com, an online car search site. “But they find that it’s not true.” Hertz said in a statement that it “continues to offer its customers the widest possible selection of vehicle makes and models, including electric vehicles.” The biggest problem for rental companies was the rapid depreciation of Tesla vehicles, the leading manufacturer of electric cars. Last year, the company led by Elon Musk sharply reduced the prices of new models to boost sales, and of course this also depressed the price of used Teslas. Used electric cars have lost value faster than the average used gasoline car this year, and for the first time in May, they cost less on average than used gasoline cars.
Resale value is a critical part of rental companies’ financial calculations, as cars are usually sold before they accumulate too many miles. Rental companies record a loss if the cars are sold for less than expected. In the first three months of the year, the declining value of Hertz’s electric fleet reduced the company’s profits by $195 million. Rental companies are “100 percent dependent on residual values,” said Shay Natarajan, a partner at Mobility Impact Partners, a private equity firm that invests in sustainable transportation. “It’s a very difficult business model. Elon Musk opens his mouth and the industry goes into a tailspin.”
But some car rental companies say they’re not dropping battery cars because of the price drop. Those who have never driven an electric vehicle face a steep learning curve when they get a battery car. Rental companies usually don’t have employees who would give training to customers. Hertz, for example, offers online information to electric vehicle renters and sends them instructions by email. Hertz said it has “learned a lot as the first player in the SUV rental market, and as we adapt our fleet to consumer needs, we are focused on continually improving the rental experience, which includes making it easy for all customers.”
Refueling is another important issue. Many rental companies require customers to charge EVs to about 70 percent before returning them. That means customers have to plan to stop at a charger toward the end of their trip, which isn’t always easy when people are trying to get to their plane and there’s no fast charger near the rental. Rental companies do not want to take responsibility for charging, because they like to be able to return the cars quickly, and they themselves cannot install chargers at airports. “Airports are notoriously unfriendly when it comes to developing electrical infrastructure,” said Raghu Iyengar, a Volkswagen executive whose duties include sales to rental companies. According to him, there is almost zero demand for the Volkswagen ID.4 from rental companies. .
Tesla renters have access to the Supercharger network, the largest fast charging system in the United States, but most Superchargers only work with Tesla cars. Those renting cars from automakers such as Kia, General Motors or Polestar must use chargers offered by other providers, each of which uses its own mobile phone app to pay. Renters should also be aware that there are few or no fast chargers, especially in rural areas. Iyengar is optimistic. As electric vehicles become more popular, rental companies will have to deal with them. “There will be an electric tide that will lift all boats,” he said, “and rentals will follow.”
Source: sg.hu
