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Last summer, Greg Scott and his partner stood at a rental car counter at the Portland, Ore., airport and faced a big vacation decision. The agent had offered them an electric BMW for the same price as the gas-powered model. After a few minutes of deliberation, the couple declined.
“We were going to be crisscrossing the state, visiting relatives, visiting friends, going to wineries, that sort of thing, and I didn’t know where I would be able to charge,” said Scott, a spokesman for the American Car Rental Association who drives an electric vehicle at home in Virginia. “It wasn’t range anxiety. It was more like charging anxiety.”
After an initial jolt of excitement for EVs, the rental car industry has watched interest wane, expenses soar and its investment in eco-friendly transportation fizzle. For many travelers, including personal EV owners, the appeal for renting a zero-emissions vehicle is tepid. The anemic demand is one of several factors that has forced companies to thin their EV inventories and rethink their strategy.
In December, Munich-based rental agency Sixt said it would sell its remaining Teslas, which it had last purchased in 2022, as part of its “regular de-fleeting process.” Then this month, Hertz said it was going to ditch about 20,000 EVs from its U.S. fleets. The divestment was a dramatic reversal from its 2021 plan to acquire an unprecedented 100,000 Teslas.
“It’s a black eye for Hertz and for the overall rental car industry,” said Dan Ives, a managing director and senior equity research analyst with Wedbush Securities. “The appetite was stronger than the reality, and they never had the marketing and the education behind it.”
The car rental industry is not abandoning EVs; it is just tapping the brakes. Hertz is only selling one-third of its collection. In an email to The Washington Post, a Sixt spokesperson said the company wants to increase the “enthusiasm for e-mobility” among its renters. It is aiming to switch 70 to 90 percent of its Europe fleet to electric by 2030 and has made significant investments in the field, such as installing charging stations at its branches.
Enterprise Holdings owns several thousand EVs throughout North America and Europe, but spokeswoman Lisa Martini said demand is low. The company will expand its inventory if interest grows and the EV industry’s framework advances.
“As infrastructure for EVs continues to improve, we anticipate demand will follow and we’ll continue to thoughtfully transition our fleet to meet those needs,” Martini said.
For now, companies desperate to rent EVs are using deals and discounts as an incentive. For a limited time, Hertz is offering 20 percent off EVs plus a free day’s rental on bookings of three days or more. Some counter agents are also taking a hard sell approach.
“What I heard universally from business and leisure travelers over the past six to 12 months is that rental agencies were throwing electric cars at them,” said Karl Brauer, an executive analyst with ISeeCars.com. “They would say, ‘Yeah, we know you said you wanted a Toyota Corolla but would you please take the EV. You don’t have to return it charged. We’ll cut the price. Please, please, please, please, please.’”
In a recent interview with CNBC, Hertz chief executive Stephen Scherr said the decision to cut the company’s EV fleet was not a referendum on green cars. It was pure economics, an attempt to stem financial loss. Hertz did not reply to several requests for comment.
“We’ve talked to Hertz’s leadership and I believe that they’re still really committed to EVs,” said Joel Levin, executive director of Plug In America, an EV advocacy organization. “I think they’ve just decided that they need to slow down their rollout a little bit.”
Auto experts said the rental car industry was not prepared for the challenges of EVs. Brauer said servicing and fixing EVs can cost more and take longer than maintaining traditional gas vehicles, because of the limited number of EV dealerships and repair facilities, and a scarcity of parts.
“They thought there would be a higher profit margin because they cost less to operate,” Brauer said. “What they found was the opposite: They cost more to operate.”
New EV drivers were also banging up the cars, because of a lack of instruction. Brauer said people were driving off the rental lot without fully understanding how the car operated or how recharging worked. Some vehicles’ rapid acceleration also caught them by surprise.
“They have instant torque at low speed, and people start playing with it like it’s a racecar,” he said. “There’s no engine noise to tell you how fast you’re going, and they weigh more because they’ve got big heavy battery packs, so they’re harder to stop.”
The rental car companies also misjudged travelers’ level of enthusiasm for EVs. Scott said no one, including himself, wants to waste precious vacation time searching for a charging station. Brauer said juicing up the battery before catching your flight home can add more stress to an already tense predeparture routine.
“Who wants to deal with charging an electric car in the process of getting from their travel destination to their home destination?” Brauer asked.
While rentals floundered, the resale market also tanked. The companies, which make money by selling their used rental cars, were hurt by Tesla’s move to reduce prices on its new cars.
“Tesla did a big price cut in the past year, and because all the rental cars agencies have this business model where they run the cars for a year or two and then sell them into the used car market, the price cut really affected the value of that fleet,” Levin said.
Public charging stations are multiplying
Green travel advocates remain optimistic about the future of EVs in the rental market. They consider Hertz’s culling a stumble, not a step backward.
“I think their level of ambition was very, very high. They did something bold that no one else has ever done before, and they’ve got some learning to do,” Levin said. “I think they’re just recalibrating a little bit.”
However, help is on the way. The Biden administration set a goal of providing a half-million public charging ports by 2026. According to a White House news release dated Jan. 19, the latest count is 170,000 chargers. In addition, the departments of Transportation and Energy announced $325 million in new investments that will improve the quality and increase the quantity of public chargers around the country. Another $623 million is earmarked for connecting more dots in the national charging network.
Scott said he would like to see more chargers installed in tourist areas, such as hotels, resorts, beaches, airports — and even Disney World.
“The same way you fill up your tank before you get back to the airport, you should be able to basically stop by and do a Level 3 charge for, say, 10 minutes and then return the car so you don’t get charged a fee by the car rental company,” he said.
A multiyear project run by the Department of Energy could improve the EV rental car experience. The primary purpose of the Athena project, which debuted in 2018, is to create a master plan for electrifying transportation hubs. For the Athena Zero-Emissions Vehicle phase of the initiative, Dallas Fort Worth International Airport is a test site.
“If we can solve this challenge of getting the car rental industry electrified, at least in concept, then we can move on to other parts of the airport, because, quite frankly, the car rental industry is probably the biggest power demand, besides perhaps lighting or heating the actual terminal.” Scott said.
Just like any car adventure, travelers should equip themselves with the tools that will ensure a safe and angst-free road trip.
For EV drivers, this means mapping out a route that accounts for charging stations. Tesla’s navigation system and app displays its charging locations. For other models, Levin recommends such apps as PlugShare and ABetterRouteplanner.
To avoid accidents, accelerate slowly and use eco-mode, which conserves energy and reduces the rate of acceleration. Give yourself ample space between cars, because the heavier EV may require more time to stop. Electric cars are very quiet, so make sure the sound emitter is functioning and be careful in parking lots and crosswalks where pedestrians are present.
To maximize range, follow the 80/20 rule: Keep your car charged below 80 percent and above 20 percent. Be aware of how cold temperatures can affect an EV’s performance. According to Consumer Reports, an Arctic chill can decrease the battery’s range by 20 percent and slow down recharging time. Using the car’s heater can also sap the car’s juice. One trick for extending your range is to heat the interior while the car is still plugged in. You can make your Tesla toasty while still tucked in your hotel bed, a perk that gas-powered cars can’t claim.