Hertz Global has been working hard to stack up an electric vehicle fleet and its big batch of EVs could be a “safety net” if EV buyers don’t pull through.
Key Details
- As demand for electric vehicles (EVs) skyrockets, rental-car company Hertz has been buying a big load of EVs to offer its customers.
- The number of people wanting EVs hit a worldwide tipping point. The latest EY Mobility Consumer Index shows that 52% of people looking to buy a car want to buy an EV. This is the first time the number has exceeded 50%, representing a rise of 11 percentage points since last year.
- Although the number of people wanting EVs has taken off considerably, the price of the vehicles remain high. If buyers don’t actually buy up all of the EVs like expected, the rental car company could be a “safety net”.
Why it’s news
In the past, it was considered a failure when automakers had to send a big number of cars to rental services.
Automakers typically took aging or unpopular models, stripped them of many creature comforts, and sold them to the likes of Hertz and Avis at discounted prices. It was a way to keep production lines moving until a freshened version of the car got to market, according to Bloomberg writer, David Welch.
EVs are big sellers right now so selling a large number to rental car companies isn’t a losing move like it once would have been considered; it is more of a backup plan.
Since demand is so high for EVs, production companies are working to make as many of them as possible, but the prices of the cars remain high.
The average EV in the U.S. sells for about $67,000, which is about $20,000 more than average ICE models, which are themselves at record high price levels. As automakers introduce cheaper EVs—like GM’s Chevrolet Equinox that will start at $30,000 next year and the Chevy Silverado and Ford Lightning pickup that will offer $40,000 versions—that price point could eventually change, according to Bloomberg. But for now, EVs are out of reach for most consumers.
The rental companies can offer the customers the ability to drive the sought after vehicles without having to pay the big ticket prices, so until the prices drop down to more affordable levels, the car makers will most likely continue to sell them to rental companies.
Backing up a bit
General Motors recently announced that it is selling up to 175,000 electric vehicles to Hertz Global over the next five years.
Starting in the first quarter next year, GM will start to supply electric vehicles such as the Chevrolet Bolt EV and Bolt EUV to the rental car company.
