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Hertz Is Selling EV Rentals All Wrong
Hertz got huge publicity announcing an order two years ago for 100,000 Teslas. Since then they’ve taken on other electric vehicles as well. The problem, though, is that people aren’t reserving them.
I regularly search car rentals and find that Hertz electric vehicles are often my cheapest option among the big rental companies. Hertz also has a special deal on EVs currently going on:
The reason that Hertz so frequently discounts EV rentals is because nobody wants them. And it isn’t because the EVs themselves aren’t great. It’s because of Hertz’s charging policies.
There’s too much of a learning curve, and forcing the customer to spend their time charging prior to vehicle return is a cost that makes consumers less willing to pay as much for the car itself. Hertz charges customers in their time, effort, and confusion and so has to lower rates as a result.
- Most people haven’t driven an EV yet. They haven’t figured out EV charging yet. And it’s not worth the learning curve for a one-off. That’s true whether renting from Hertz or not.
- However EV charging takes time. People are usually in a rush on the way to the airport. Who wants to seek out a charging station near the airport and then spend 20 or more minutes there? It’s annoying enough to have to get guess, but this takes longer!
And so even EV regulars may not want to rent an EV. The regulars might be used to home charging, and not want the hassle of charging before returning it. Sure, their hotel might have a charger but then after driving half an hour to the rental return lot the car isn’t on a full charge. Hertz allows returning cars with 75% charge, though many vehicles aren’t recommended to be charged over 80%.
Rental car companies need a different model. They may make a mint on refueling fees, but thinking of EVs the same way is a mistake. The need to return a car fully charged may be keeping people from wanting to rent those vehicles. Hertz is regularly discounting these cars because people don’t want to rent them under the company’s current rules.
No fee, or a very nominal fee, to allow customers to return EVs without having to charge them would go a long way to making them rentable. That would mean renting out the fleet, and not having to discount. Hertz would likely earn more through higher rental rates than they do pushing EVs on customers that don’t want them (either as a blind assignment, or inducing them to opt-in through lower rates).
Electric vehicles are increasingly common, but they aren’t yet 10% of new car sales and most people don’t drive new cars. Until EVs are ubiquitous there will be a learning curve renting them. And charging simply takes longer and is less convenient than a gas fill up the way it’s currently structured. Sure, an EV owner who does home charging gets a convenience compared to ever having to fill up at a gas station. But this flips when a non-regular has to figure out charging for the first time at a charging station and wait when all they want to do is make their flight.