How rental cars could soon make EVs more affordable

Electric cars could soon become more affordable as rental car operators increasingly adopt zero-emissions vehicles, increasing the number of EVs imported to Australia and opening the door to a flood of used EVs within a couple of years.

Rental car operator Hertz has just added 100 battery-powered Polestar 2 fastbacks to its Australian fleet as part of a global deal for the car hire giant to purchase 65,000 examples of the EV newcomers worldwide.

They will initially be spread across all capital cities as well as some smaller urban centres such as Launceston.

The company is also adding 100,000 Tesla Model 3s globally, something that has also kicked off in Australia.

Hertz’s Asia-Pacific vice-president, Eoin Macneill, believes electric vehicles will be key to the evolving rental market in the medium term.

“We’ve gone in early on EVs as a company and we want to be famous for that and lead the charge,” said Macneill, who oversees 40,000 rental vehicles across the country.

“We’ve landed 100 Polestars and we’ve got plans to add hundreds more.”

Macneill believes the Hertz fleet will help make EVs more affordable for used buyers within a few years.

“We’ll be quick to the used car market … quicker than a normal private or commercial customer,” he said.

“You don’t have a five- or six-year delay to a used vehicle. That’ll help people find a vehicle at a price point that we believe will make it even more attractive.”

But the Hertz chief said the adoption of EVs into the Hertz fleet will change the way the company does business, including how long it holds its cars.

Macneill says the lesser maintenance requirements of EVs – Polestars only need to be serviced every two years and the servicing is covered by the brand for the first five years – will mean fewer issues.

“Our average ICE vehicle [will be in the fleet for] 12-18 months and we think an EV will be probably two to three years because of their maintenance quality.”

He says the lesser servicing requirements “will give us an opportunity to monetise the vehicle for longer and depreciate it over a longer period”.

“There’s some definite upside benefits of an EV fleet and a connected car fleet,” said Macneill, highlighting the connected Android Automotive operating system and over-the-air software updates that provide opportunities with telematics and Hertz-specific additions, such as an app tailored to assisting customers.

But EVs are also creating challenges for Hertz as it looks to eventually roll them out to all 300 of its rental locations across Australian and New Zealand – including remote locations such as Darwin and Broome.

Macneill said there’s a lot of work to be done on charging infrastructure, including preparing airports and other rental locations for mass charging of EVs.

“We need to do some work with our landlords in airports so we can charge those cars,” said Macneill, adding that it is leveraging the data from overseas Hertz divisions that are already running extensive EV fleets; in the US, for example, the company has 20,000 electric cars.

He said that while there may be occasional high-output DC fast-chargers at selected Hertz locations, he thinks the “sweet spot” is slower 22kW AC chargers, which are cheaper to install but can still charge an EV in as little as four hours.

The charging challenge continues in the broader community, too, with Macneill acutely aware of the potential issues.

“The customer is going to want to have out in the wild EV charging networks that are pervasive enough to make the charging range not become an anxiety thing once it’s mainstream.”

But it’s worth the effort, according to Macneill, who said EVs will eventually become mainstream within the Hertz fleet.

As well as those wanting to experience an EV for the first time, he said there will also be a market from those wanting to reduce their environmental footprint when travelling.

But he believes businesses and fleets with strict CO2 policies will also force the shift to hiring an EV.

“It’ll be evolution, curiousity, enforced demand then mainstream,” he said of the rental of electric vehicles.

Price will also play a role, especially with electricity costing less than one-third the price of fuel per kilometre.

“That’s part of the attraction we think EVs will have … the cost of 400 kays worth of fuel versus kiloWatt-hours is going to be a definite saving,” said Macneill.

While he won’t nominate a date – it’s clearly many years away – Macneill said the Hertz fleet will eventually be all-electric.

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