A giant car rental company saw major savings in managing a fleet of electric cars, as compared to internal combustion cars -- and their findings have important lessons for everyone looking to use electric cars.
The car rental industry, closely linked to airline traffic and hotel bookings, has seen a rebound due to people’s desire to travel after the easing of the coronavirus restrictions. But while companies may be happy that people are starting to come back to pre-pandemic habits, there's another piece of good news: electric vehicles.
Hertz and its EV transition
Hertz, one of the largest car rental companies in the world, aims for one-quarter of its fleet to be electric by the end of 2024. The first big step came last year as the company announced in April it would buy up to 65,000 EVs from the automaker Polestar, a joint venture between Volvo and Geely. The first units of the Polestar 2, a premium EV, became available last year in Europe and the US. Then, the company followed with an agreement with Tesla in October last year to purchase 100,000 Tesla electric cars -- was the single largest EV purchase ever made. Customers who rent the Tesla have access to Tesla’s supercharging stations, while Hertz also committed to installing thousands of chargers in its location network.
Then came another deal in September, this time with General Motors. Hertz said it will order up to 175,000 EVs from GM over the next five years. The agreement spans a wide range of vehicles and price points, from compact to pickups and luxury vehicles. The first one available will be the Chevrolet Bolt models, especially in Los Angeles and San Francisco.
But Hertz's drive to switch to electric cars doesn't necessarily come from a desire to reduce their emissions -- but rather from a practical consideration: Hertz found that EVs are between 50-60% cheaper to maintain than gasoline-powered cars. In particular, this comes from the fact that electric cars have fewer moving parts than combustion engine cars.
This isn't the first time something like this was reported. A year ago, one study found that on average, electric cars are 40% cheaper to maintain in the long run, and while they can have a higher upfront cost, they tend to be cheaper in the long run. Another study noted that for most Americans, switching to an electric car would already save money.
Other rental companies have also recently announced their own plans to transition away from the internal combustion engine. French-based Europcar committed last year to have 20% of its fleet electric or hybrid by 2024 from 3% now. This means it will have to buy over 70,000 cleaner vehicles in the next few years as part of its fleet of 350,000 vehicles.
Enterprise, another big rental company in the US, has also taken the first steps, though not as ambitious as Hertz. The company has been in an exploratory stage regarding EVs since 2014 when it began participating in the Drive Electric Orlando Rental Pilot, a study program centered at the Orlando International Airport to boost the adoption of EVs.
Transitioning to electric cars is an important part of reducing our greenhouse gas emissions, but only if the electricity used is produced through renewable sources.