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Electric Vehicles

 Rental company Hertz Global Holdings has said it would buy 100,000 electric cars from Tesla, an announcement that helped propel the EV pioneer’s market capitalisation above $1tn. 

Companies with the highest sales to rental companies were often those losing overall market share. For car manufacturers, big sales to rental companies have historically connoted weakness. 

  Selling to rental fleets has traditionally carried a stigma for carmakers. However, bulk purchases brought lower prices and served as a way to dispose of unwanted vehicles.

Rental company Hertz Global Holdings has said it would buy 100,000 electric cars from Tesla, an announcement that helped propel the EV pioneer’s market capitalisation above $1tn. Hertz Global has said it would buy 100,000 electric cars from Tesla.

Selling to rental fleets has traditionally carried a stigma for carmakers. Bulk sales

Rental fleets charge into electric revolution.

Tesla deliveries to Hertz signal change for markets that long absorbed unpopular models. Enterprise Holdings — the most significant US car rental company with the Enterprise, National and Alamo brands — said its customers were using rentals to try out EVs. 

Enterprise, family-owned and St Louis-based, said its fleet of 1.9m cars contained EVs from Tesla, Nissan, Hyundai and Volvo Cars spin-off Polestar. 

Companies with the highest sales to rental companies were often those losing overall market share. 

But for EVs, rentals are a marketing tool that could accustom drivers to the technology, analysts said; this is helping us to understand better the overall experience related to charging, range and our own operational needs,” the company said. 

Turo, a Daimler-backed peer-to-peer rental group, reported the same trend. For car manufacturers, big sales to rental companies have historically connoted weakness. 

EVs still account for only 2 per cent of car sales in the US. That makes Hertz’s move a “genius idea”, said Mike Ramsey, an analyst at Gartner. So investors were enthusiastic when executives at Avis Budget this month said they were pursuing more EV offerings. “You get the ability to socialise the car across the whole United States.”

Avis Budget, whose shares have soared this month, has worked with car manufacturers over the past year “to optimise a product line for electric vehicles” and with EV infrastructure companies “to tackle logistical hurdles about . . . But Hertz, which emerged from bankruptcy protection in June and listed on the Nasdaq stock market in a larger-than-planned offering this week, said that deliveries had already started and rental customers were showing “strong early demand” for the vehicles. 

“Our assumption is that some [electric vehicles] will be rented by EV-interested consumers who want experience,” said Michelle Krebs, an analyst at Cox Automotive. 

Enterprise said about a quarter of its vehicles were cleaned and re-rented within an hour of their return — a turnaround time that will be difficult to achieve when the fastest electric chargers take at least 30 minutes to replenish a battery. “The availability of power and infrastructure will be key considerations as we look to operate high volumes of EVs at large airport facilities,” the company said. 

    Last month, the Hertz announcement was clouded several days later when Elon Musk, Tesla chief executive, tweeted on November 1 that “no contract had been signed yet” with the rental company. 

Expanding electric cars’ share of US rental fleets, which now stands at 5 per cent, will be a challenge, said Hamzah Mazari, an analyst at Jefferies.

About 3 per cent of the 650,000 vehicles available to rent are electric at peer-to-peer rental company Turo. Mazari said the average rental is four days long, with the customer driving about 100 miles a day, meaning they would probably need to recharge during their journey. 

    So-called range anxiety, or the fear that an EV will run out of energy, presents a more acute problem for rental customers than everyday drivers. 

When it comes to fleet EV sales, General Motors and Ford are concentrating more on commercial operators than rental companies. 

EV numbers have increased faster since 2014 than the total number of cars and trucks on the platform. The company did not respond to a request for comment on rental car sales. Yet, the way that most EV owners recharge — overnight and at home — may not be available at a hotel.

Summarised www.sba.tax



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