While electric vehicles (EVs) are becoming more affordable, widespread adoption has yet to occur in the U.S., but EV rentals could change that.
- Rental-car customers may unexpectedly find themselves with an EV rather than a traditional gas-powered vehicle.
- For some customers unfamiliar with the models, a surprise EV may be an inconvenience, but car-rental companies like Hertz are working to change that by providing customers with the resources to take full advantage of EV perks.
- The company plans for one-quarter of its fleet to be EVs by 2024.
Why it’s news
Widespread EV adoption has been slow, but offering EV car rentals could allow customers to try a new type of vehicle before buying. The two main barriers to EVs—price and lack of charging stations—are starting to fade away, and EV rental cars may be able to usher in new acceptance of the technology.
Currently, only 4% of Americans own an EV. Another 12% are seriously considering buying one, while 43% say they would consider buying one in the future. About 41% say they would never consider buying an EV, according to a Gallup poll.
EV rentals have the potential to make converts out of Americans who are not seriously considering switching to electric. Taking a rental EV on a trip allows customers to see whether or not an EV is practical for their lifestyle.
Backing up a bit
The barriers preventing Americans from switching to EVs are starting to fade away. EV prices are beginning to lower as EV manufacturer Tesla tries to drive prices downward. Tesla CEO Elon Musk stated that he could sell his vehicles for “zero profit” due to high margins on the company’s driverless software.
In 2023, the company’s Model Y price dropped from $65,000 to $47,000—below the average vehicle price in the U.S. Tesla’s price drops are forcing competitors to lower their prices as well, though they may not be able to keep up without the same operating margins as Tesla.
In addition to more affordable pricing, EV infrastructure in the U.S. is also growing, giving EV users more places to charge their vehicles. Tesla and Ford recently announced a partnership to share EV charging stations in a move that will provide users with more charging options.
The Biden administration has also been incentivizing EV infrastructure development. It has announced a goal of 500,000 EV charging stations by 2030.