The Impact of Electric Vehicles on Rental Companies

If you are considering trying out an electric vehicle, renting one could be a cost-effective option. However, the availability of electric vehicles for rental purposes might soon become limited.

Electric vehicles have posed financial challenges for rental companies, particularly impacting Hertz. In January, Hertz had to revise its plans to acquire 100,000 Teslas due to a rapid decline in the cars’ resale values. This unexpected development has made rental companies cautious about investing in electric vehicles.

Hertz’s experience has had a ripple effect on the rental car industry, leading many companies to offer significant discounts to sell off their electric vehicle inventory. As a result, it might take some time before rental companies resume purchasing electric vehicles for their fleets.

According to S&P Global Mobility, over 4 percent of cars sold by manufacturers to rental companies last year were electric. However, this year, the percentage has dropped to just 1.4 percent, indicating a shift away from electric vehicle acquisitions.

In theory, renting an electric car provides consumers with an opportunity to experience and familiarize themselves with environmentally friendly vehicles that produce zero tailpipe emissions. Stephanie Valdez-Streaty, the director of industry insights at Cox Automotive, emphasized the crucial role rental companies play in influencing consumer behavior and promoting the adoption of electric vehicles.

Despite the potential benefits of renting electric vehicles, Valdez-Streaty pointed out that rental companies are currently reducing their electric vehicle fleets, leading to temporary attractive rental deals. However, as the supply of electric vehicles diminishes in rental fleets, these offers may not be sustainable in the long run.