Hertz made headlines in January when it decided to sell off about 20,000 of the 100,000 Teslas, along with some other EVs, it previously ordered. Hertz reported several reasons for the sale, which opened up questions about how viable EVs are in a rent-a-car fleet. Many of the reasons actually stem from the unfamiliarity many customers had with EVs, especially Teslas, when having their first experience with one. But are they actually a great rental car?
Hertz reported Tesla renters were getting in more crashes, costing more per crash, and that customers simply weren’t requesting them at the rate expected. At first they were expensive, but in later months EV rentals were very reasonably priced, lower than other cars with similar luxury levels.
Hertz’s crash worry is real. Research has found that when people switch power trains, they have about 14% more crashes until they get used to the new power train. This also happens the other way, when people switch from electric (back) to gasoline. There is a different driving style and some people take time to get used to it. Teslas are not just unfamiliar to gasoline drivers, though, they also accelerate like high-end sportscars, which can create more risk.
Many of these problems might be fixed by having a special mode in the car for use by gasoline drivers. In this mode, acceleration would be muted and driving styles and user interfaces would try to match gasoline cars. EV owners renting the cars could turn off this mode. (Tesla even has a special mode when they give a loaner Tesla out to an existing Tesla owner, where they make the car download the user’s full profile, and act just like the driver’s own car. This would be nice in rentals.) There’s a limit to this because Tesla is devoted to some very different user interfaces, putting all controls into the touchscreen, with no buttons to act like regular cars.
Many gasoline drivers, however, are scared of recharging questions and not familiar with how to do it and how to plan it. EV driving does require different thinking, and in many cases a planning step not present for gasoline cars.
In many cases, which is to say when you have to recharge. What Hertz didn’t seem to market is that a large fraction of car rentals in cities don’t go more than 200 miles and thus never need to recharge. That makes EVs a great choice for this large group of renters. There is a larger learning curve for a new driver attempting to rent for a longer road trip. Such rentals might be best sold to people with EV experience for now.
When you rent a gasoline car, you have to fill it up just before returning it, or pay a fat premium on any missing gas. For EVs, Hertz allows you to return it with 70% at no charge, but it may give you the car with just 75-80%, which means that’s no real gift of free miles. If you go below 70% you must recharge, but for $25 they will recharge for you ($10 more if you aren’t in their free rewards club.) $25 is a lot if you want to return the car with 65%, but it’s actually a pretty tolerable price if you return it fairly low, since a 45kWh (180 miles) recharge at a supercharger in many towns will cost close to $20.
But most people don’t know how many miles they will use, so this offer isn’t that attractive. And EV recharging is too slow to be done on your way to the airport. It’s really only practical if you do it the night before, or you have charging at your hotel. Many hotels do have it, and in the future almost all will, but that’s not true today. In that case it will be easy to return the car above 70% and the EV rental will have less hassle than a gasoline one. Today, if your hotel doesn’t provide you may need to make a short stop at a supercharger the night before you return. Even so, it’s better than gasoline cars which must be returned more than 95% full to avoid a fat charge.
None of this, though, was explained to renters in marketing materials. The message should have been “Not driving too far, or have charging at your overnight location? This car will have the lowest hassle. Going a long way? This car will save you a lot on energy, but you need to know how EVs and charging work to make the best of it.” There are a lot of people in these categories and Hertz should have been able to find them and rent to them.
Better would have been to, instead of requiring 70%, allowing a drop of say 25%. That means no-hassle if just doing 50 miles, and not too much beyond that. Or even better, just charging the market rate for recharging. That’s not likely to happen considering the history of rental car companies on what they charge for gasoline.
Hertz may still be suffering from gasoline thinking, which pushes people to fast chargers. 80% of EV owners charge at home or work with slow chargers, and almost never use fast chargers when in their home city. That’s the way EVs are meant to work and how they give the best experience—fast charging is the backup plan. If rental drivers are pushed into fast charging, they naturally will have a poorer experience.
On the other hand, most car rental companies offer a price to pay for the full tank and then return it empty. The price is good, but the problem is it’s hard to time it to return with an empty tank, and this is impossible on short stays. With electric, a “full” battery at night rates (14 cents/kWh on average) is under $7. If Hertz said, “Pay $7 and you can return it at any charge level you like” that would appeal to many customers, since it’s pretty hard to get away with paying less than $7 on any gasoline rental.
One reason Hertz doesn’t do that is they don’t actually have banks of slow charging at their depots yet, and even when they do, that does require the car hang around for a while. They recharge their cars at more expensive fast chargers and either pay staff to handle it or pay outside companies like Sparkcharge even more to show up with battery based chargers. That higher cost got passed onto customers.
Of course, Hertz has hardly sold off their whole fleet, just a fraction of it. So there’s still room for customers to learn these things and to make these improvements. It seems the important step missing is education, including education for customers planning to rent, and easy information for those who have started a rental. Teslas, and most EVs have screens where videos can play to guide drivers.
If Hertz wants to do better, the following approaches might make sense:
- Find out if the renter is experienced with electric cars and Teslas
- Prepare newcomers to the EV experience.
- Before the customer chooses their car, see how much they think they’ll drive it, and point them to the right car.
- Help them find Level 2 charging at hotels and other locations so they have an experience more like owners.
- Understand they won’t want to fast charge when returning in a hurry. Don’t treat that as a revenue source, just find ways to make their experience better.
- Work with Tesla and car OEMs to provide videos and other help just for renters with different experience level. Make the car smart so it notices where they are staying and alerts them where and when they should charge, without them knowing how to ask the car for that help.
