Fred Crawley
Recent plans to integrate electric
vehicles (EVs) into the world’s largest car rental fleets have
again highlighted asset longevity as a major factor in the design
of lease and rental service offerings for the zero-emissions
world.
Go deeper with GlobalData
Hertz, the world’s biggest vehicle
rental company, announced in February that it had made a deal with
Nissan to start offering its mass market electric car, the
lithium-ion battery powered LEAF model, at rental sites across the
USA and Europe by early 2011.
Soon after, European rental group
Avis announced its own partnership with the Renault side of the
Renault-Nissan alliance, promising the provision of four Renault EV
models at its rental sites from 2011 onwards.
Both companies will need to change
aspects of the basic car rental model to reflect the higher price
and questionable resale prospects of EVs, and one way of doing this
will be to keep cars in fleet circulation for longer.
Laurent Sculier, Avis’s European
fleet director, explained that his company will be taking on a
small volume of EVs at first, on the basis of a fixed price buyback
arrangement with Renault, to test demand for EV rental.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataWhile conventionally-fuelled
vehicles are kept on fleet for around six months before entering
the resale market, Sculier says Avis’s EVs will be put to use for
between 15 and 18 months.
Sculier said, due to the range
limitations, EVs would be targeted at urban users looking for a
short-term rentals. This relatively low-wear use, combined with the
general durability of a car with much fewer moving parts than a
conventional vehicle, will allow rental EVs a longer working
lifespan, he said.
The longer serving time of Avis’
EVs will be necessary to help spread the pain of additional cost,
however. The Renault models taken on by Avis will be around €7,000
(£6,250) more expensive than their fossil-powered counterparts.
Add to this the cost of installing
charge points in rental outlets, and there are some serious
overheads. Sculier said rental rates would definitely have to be
raised, but would be offset by lower fuel costs for customers.
“Overall, our margins will be
pretty similar to those achieved with the rest of the fleet,” he
explained.
“We have a responsibility to make
this technology available at a competitive price, and we won’t
market EV rental as a luxury product in hopes of generating a
higher margin.”
While Sculier felt the consumer
market for EVs will see individuals buy and sell vehicle chassis
while leasing batteries separately, he foresaw the car rental
market continuing to consider vehicles and their batteries as a
single unit.
Nevertheless, it seems like car rental firms, like monthly lease
providers before them, are still acting as feelers through which EV
manufacturers can taste the market – Avis does not foresee more
than 10 percent of its fleet going electric before 2020.
