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Car Rental Companies Face Challenges in Renting Electric Vehicles
In February 2012, Nissan and Europcar announced that the Nissan LEAF would be available for rental in Paris and London. But EV rentals are not always well received.
After jumping on the electric car bandwagon a couple of years ago, auto rental companies and their customers are apparently falling out of love with plug-in cars. Last month in the U.K. rental car company Europcar quietly confirmed that it had removed all electric cars from its fleet because demand for EV rentals was too low. In New York, where car rental giant Enterprise offers customers the chance to choose an electric car over a gasoline model, customers are returning electric car rentals to swap them for gas-powered cars.
What’s going wrong and how can it be changed?
Renter Anxiety and High Price
Mike Harrigan, eFleet manager of City CarShare and former vice-president of marketing at Tesla Motors, said that range anxiety is prominent among car renters when it comes to choosing an EV, especially if the renter has no prior experience of an electric car. “Battery EVs aren’t well suited for traditional car renting due to range limitations, uncertainty and time required to recharge,” he said. Like new EV drivers, customers renting an electric car for the first time are unfamiliar with the technology, and therefore can be wary of real-world range. Newbies also do not fully understand the different types of charging technologies such as 240-volt Level 2 and CHAdeMo charging.
Without any guidance from the rental company on finding and using local charging stations, even established EV drivers avoid EV rentals when away from home. In 2011, I experienced this problem for myself after renting a Nissan LEAF in downtown San Francisco. With no guide to local charging stations and in a city I didn’t know well, I found my own range anxiety much higher than it would have been at home.
An Enterprise Rental Nissan LEAF in San Francisco.
To counteract the range anxiety and unfamiliarity with EVs, cars fitted with range-extending engines or larger battery packs would help. “Improved range would help, but it comes at a price that most people don’t want to pay,” said Harrigan. In other words, EVs with higher capabilities are more expensive for the rental companies to purchase, and as a result, the agency passes the higher cost to its customers.
“No wonder no one wants to rent one,” said Harrigan. City CarShare, he said, tries to price its EVs at or below the rate for similar gasoline cars, but very few other companies follow the same policy.
Evolved Solutions Needed
Traditional rental models don’t work for electric cars for a number of reasons: a lack of coherent, ubiquitous charging infrastructure; poor awareness of EVs by both consumers and rental companies; and rental agreements that cover a single car, rather than an interchangeable set of vehicles over a period of time.
But as car sharing services like Car2Go have shown, electric car rentals—when packaged in the context of short-term, by-the-hour car share schemes for registered members—can be extremely popular, especially if appropriately incentivized.
In Berlin, where the Car2Go Service offers both gasoline and electric Smart ForTwo cars, incentives come in the form of free rental minutes if a customer remembers to plug the rented electric car into a public charging station at the end of a rental period. The promise of those free minutes alone increases uptake on EV borrowing.
The very concept of car sharing could hold the key to improving an electric car rental experience. “The system allows a car share member to reserve, pick up, drive, and drop off cars in an unattended model at distributed locations,” siad Harrigan. Instead of requiring renters to use just one car during their visit, rental companies can mix and match cars to renter’s itineraries to meet specific travel needs. As a result, EVs can be included on routes where there is charging, but customers can switch to longer range vehicles for other days of a trip.
Harrigan believes that charging stations must be placed in locations where EV renters are most likely to visit, such as hotels, convention centers and popular tourist spots. And that more progress is needed in recent industry efforts to make EV charging networks operate on a common open platform for easy access and payments. Without these efforts, electric car rental is likely to continue to encounter the same obstacles causing some big rental companies to cease offering EVs.