There was much fanfare at the turn of the decade when rental giant Hertz announced it was investing big to electrify its fleet. The firm and a whole host of other renters spent millions adding Tesla $TSLA and Polestar models to their fleets, only to start selling them off cheap when the problems started mounting.
Now, a report from the New York Times revealed that everything from sky-high repair costs to an increased likelihood of crashes led to the issues rental companies faced electrifying their fleets. All this means that the future of the rental EV may be in doubt, as the Times reports:
Hertz and other rental car companies found that offering customers electric vehicles at a profit was more difficult than they had expected. Most rental car complexes at airports lacked chargers. Many renters were not prepared for how quickly electric cars accelerated, leading to more accidents and higher insurance premiums. And some companies found they couldn’t get spare parts for such cars as quickly as they could for gasoline cars.
“They thought E.V.s would be more simple and straightforward and cheaper to maintain,” said Karl Brauer, an executive analyst at iSeeCars.com, an online car search site. “They’re finding that’s not true.”
In a statement, Hertz said it would “continue to offer our customers the widest possible choice of vehicle makes and models, including electric vehicles.”
The biggest problem that rental giants faced, reports the Times, is the massive depreciation seen among EVs in recent years. Thanks to price cuts on new cars, higher repair bills and other factors, used EVs lose much, much more value than their gas-powered counterparts. This is bad news for rental companies as they often sell off their cars after they’ve used them to recoup some of the costs of running a rental firm. However, selling cars for less than expect means a painful loss for rental firms.
The numbers just don’t shake out, which is why the number of EVs sold to rental companies has fallen dramatically this year. The Times reports that four percent of cars sold to rental firms in 2023 were electric. This year, that figure has dropped to around 1.3 percent.
The revelation is a shame, as widespread adoption of rental EVs would offer more and more people a chance to try out an EV for an extended period of time.