A transition from internal combustion engine (ICE) gasoline cars to electric vehicles (EVs) will help to move the world toward reduced carbon emissions and improved air quality. Consumer confidence and affordability are the main barriers to the widespread adoption of EVs, so rentals have an important role to play in the broader success of EVs.
EV rentals are often the first interaction consumers have with all-electric transportation. That means EV rentals can help more people experience EVs, which can create awareness about EVs, reduce their perceived risk, and help assuage concerns over ICE vs. EV purchase cost disparities.
Reducing Perceived Risk through EV Rentals
Research published in the journal Energy suggests that EV rentals can reduce customers’ concerns about taking the risk of purchasing an expensive and uncertain commodity like an EV. EV rentals can also promote the sustainable side of EVs in terms of transportation, environmental, and social benefits.
With an increase in positive EV experience, their associated perceived risk decreases. My family started with a used Nissan Leaf as a second family car — an around-town car. Learning how to maximize its low range became a primer that applied to an eventual purchase of a Tesla Model Y — with triple the range — as our full time vehicle. A couple of years later I also bought a used Chevy Bolt for road trips at my summer cabin in the woods, applying the experiences from the Leaf and the Model Y to this EV selection.
EV rentals have unique appeal due to factors such as their environmental protection and contemporary safety features. It’s clear that customers’ perceived value of EV rentals can effectively improve trust in EVs as a whole, actively drive future EV experiences, and play a positive role in customer satisfaction. For example, a 2021 research study indicates that young consumers who are conscious of an EV’s environmental responsibilities, social norms, and quality are likely to rent an EV. Renting an EV should be a relatively low risk act, especially in contrast to the numerous decisions that go into buying an EV.
Renting an EV can teach a consumer valuable lessons about zero emissions transportation:
- The end-user cost is about 2–3 cents per mile for EVs and 13 cents per mile for ICE vehicles.
- Driving an EV means global warming emissions are less than a quarter of the average gasoline vehicle.
- EV drivers need to plan for charging, which can take happen at a number of places, including a home residence, a hotel, their workplace, or a public charging station— and fast charging options clearly outweigh Level 2 or Level 1 charging.
- EVs are a win-win scenario: they’re generally high tech, accelerate quickly, and have fewer maintenance needs than an ICE vehicle.
Help Wanted: Rental Car Company Staff Who are Knowledgeable about EVs
The negative environmental impact caused by ICE vehicles has promoted the use of EVs to achieve sustainable transportation systems. Even with that persuasive rationale, the widespread adoption of EVs faces many challenges.
It’s really, really important that EV rentals are not taken lightly by rental company staff. An EV rental cannot be treated as just one more haphazard life experience, as the author of an Atlantic article recalled.
“With no forewarning, no experience driving an EV, and virtually no guidance, what was supposed to be a restful trip upstate was anything but. Just a few hours of highway driving would sap the battery, leaving me and my friends scrounging for public chargers in desolate parking lots, the top floors of garages, and hotels with plugs marked for guests only. It was a crash course in EVs for four people who had never heard of CCS versus CHAdemo, the 80/20 rule, and Level 3 chargers.”
More and more media reports indicate that customers who are trying out EVs through renting them are coming away discouraged or disgruntled. Without rental company staff assistance, drivers who take a chance on an EV may never “appreciate how quiet and comfortable the car was, how regenerative braking makes driving more pleasurable, or how pulling away from an intersection when the light turns green leaves all the other cars around you in the dust,” as our CleanTechnica colleague reminds us.
Yes, the necessary combination of rental car customer loyalty, customer perceived value, and the rental service system needs to be enhanced, asan article in the Industrial Engineering Journal outlines. It will take rental car companies that are willing and able to educate consumers about driving EVs in order to overcome consumers’ perceived risks and concerns.
From the POV of EV Car Rental Companies
Like businesses around the world that have fleets of vehicles, rental companies need to find ways to decarbonize their fleets, and EVs can help them to achieve that goal. The financial success of technological innovation depends on the ability of innovators to commercialize their advances, so EV rentals must be profitable for long term business viability.
The electrification of the car rental industry is at its early point, with around 215,000 EVs making up about 3.3% of the global rental fleet. Writing in Bloomberg, Andrew Grant reminds us that rental car companies need EVs, which are depreciating physical assets, to fit into multiple categories. “This presents numerous challenges,” Grant outlines, “ranging from the ease with which consumers can charge, to variations in resale values.”
Each rental car company has its own EV ambitions and target consumers.
- Hertz: leisure customers;
- Europcar: corporate market;
- Sixt: higher-priced vehicles for premium users; and,
- Avis: 60% of their fleet’s sticker prices fall in the $20,000-$50,000 range.
The pricing scheme of EV rentals is one of the most important issues that affect the development trend of the industry. Do people who rent a vehicle simply choose one that will meet their basic travel needs? If so, EVs may not fulfill their requirements. Or, are vehicle renters willing to pay a premium rate to rent a clean energy vehicle?
BNEF research shows EVs are making the rental car business even tougher, as battery electric vehicle residual values were 18% to 30% lower in November, 2023 compared to March, 2022. That’s because the post-pandemic shortage of vehicles subsided and demand for vehicles lined up closer with supply.
“Car rental companies have major challenges ahead with electrification,” Grant says in the Bloomberg article, “but anyone invested in the decarbonization of transport should be cheering them on. Any early progress this sector makes will have compounding benefits for the EV industry.”
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