Car Rental and EVs: Questions that Need Answers

The rental car industry is rapidly transitioning to electric vehicles (EVs), with major players like Hertz Global, Avis Budget Group, and SIXT committing to significant investments in EV fleets. However, there are many factors to consider when planning such a significant transition.

Craig Hirota of Associated Canadian Car Rental Operators (ACCRO) poses a series of questions that independent car rental companies should consider when developing their EV strategy.

Infrastructure

Are there use cases where it makes more sense to have multiple Level 2 chargers and additional EVs instead of expensive DC fast chargers?

Is grid leveling and vehicle-to-grid something that needs to be included in future fleet use plans?

Can fleet operators monetize unused EVs via grid leveling or carbon offset crediting, rather than viewing EV downtime as a sunk cost?

Does greater implementation of Level 2 chargers and/or EVs with grid-leveling capacity present a more achievable EV transition than increasing capacity to support more DC fast chargers?

Are there opportunities for partnerships with utilities for load leveling, participation in a permanent carbon offset regime, or partnerships with municipal transportation services to provide “last mile” capacity?

EVs

How will aggressive EV sales/registration goals/mandates in many worldwide jurisdictions reconcile with the trend toward increasing unaffordability of new vehicles (ICE and EV)?

What is the minimum price to produce a North American compliant, basic transportation EV with intra-city range?

Can the shared e-bike/e-scooter model work with a sufficiently inexpensive basic transportation EV?

Will EVs continue to resemble current ICE vehicles in size, features, and expense or will their evolution fork into basic and legacy streams?

What changes are needed in the insurance industry to enable widespread availability of driver’s insurance?

If densely populated urban centers adopt congestion pricing models, will EVs be exempt?

The Future

What role will rental fleet operators have in the evolution of transportation and mobility, especially if personal ownership of vehicles begins to show stress?

Is there an opportunity for disruption by an organization that has a vision where EVs don’t just “plug in” to the same processes our industry evolved for profitably operating ICE vehicles?

Will there be a different second order effect that enhances business viability in the EV rental world, or will it still be book vs. real depreciation arbitrage?

As EV technology continues to evolve, the rental car industry must stay ahead of the curve to ensure long-term viability. By asking these critical questions, independent car rental companies can better plan and implement their EV strategy, taking into account the unique challenges and opportunities presented by this exciting new technology.

Craig Hirota spent 17+ years working in the risk management/loss control department with a major car rental company, including almost 15 years in Canada. He has spent the last 12+ years of his career with Associated Canadian Car Rental Operators supporting the Canadian car and truck rental industry through government outreach and for independent operators specifically via risk management training and consultation.