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Hertz on why your next rental car might be an EV

Hertz has confirmed it plans to have “hundreds” of Polestar 2s on its fleet in Australia by the end of 2022, and “thousands” by the end of 2023.

As of today, it offers 70 cars spread across Adelaide, Canberra, Sydney, Melbourne, Brisbane, Perth, Hobart, and Launceston.

The rollout is part of a broader global deal between Hertz and Polestar that will see it buy 65,000 cars between 2021 and 2026, and follows the launch of the Tesla Model 3 in Adelaide and Canberra. More makes and models will follow.

There are a few factors driving the electric push at Hertz. At launch, it’s about the “curiosity factor”; offering “a vehicle a customer wouldn’t normally rent, and wouldn’t normally buy”.

At launch, customers who rent a Polestar 2 will get free rapid charging at Evie and ChargeFox stations. They’ll also be given more information about how the car operates on handover than is currently the case.

But moving forward, the company is confident existing electric vehicle owners will want to rent EVs rather than a base Suzuki Baleno or Mitsubishi ASX when they go on holiday.

“We used to rent sedans, and no SUVs. As the customer started to enjoy an SUV for all its features, we put those on fleet,” Mr MacNeill said. The same logic applies to electric cars.

It’s not all about the customer, though. Damien Shaw, general manager of Hertz Australia and New Zealand, says the Polestar is expected to be around 50 per cent cheaper than an equivalent petrol to maintain.

Potentially undermining those advantages are the accelerated tyre wear you get from heavy, powerful cars like the Polestar, and limited parts availability.

“There’s probably only half a dozen Polestar windscreens in stock in Australia right now. A car rental company, we go through a lot of windscreens. It’ll be interesting to see what those costs are,” Mr Shaw said.

Where the average car on rental fleet might serve for between six and 18 months and cover up to 50,000 kilometres, it’s potentially possible to extend an EV’s life to double that.

“Everything we’re learning from an EV is that the kilometres aren’t as significant, because you don’t have the wear and tear on the engine,” Mr Shaw told CarExpert.

Once they’re done on fleet, these electric cars will be sold on the used market.

Filling the secondhand market with more affordable electric cars is another significant step on the road to wider adoption in Australia, where EVs account for just 1.65 per cent of all new car sales.

“Obviously there’s a huge amount of demand for EVs at the moment, and once people drive this vehicle the demand will go up,” Mr MacNeill argues.

“They actually are allocating out some stock to Hertz so we can showcase that car, but we’re also going to return those vehicles to the secondhand car market much faster than a leasing company, or a private owner. That will make those vehicles more affordable, more accessible for people.”

Government, council, and commercial fleets have long been talked about as key players in driving the change to electric power. So far in 2022 a whopping 36,244 new cars have been sold to rental fleets, and combined sales to government, commercial, and rental fleets account for 42 per cent of new vehicle sales locally.

It’ll be a while before electric vehicles outnumber internal-combustion ones on rental fleets. People still want to rent cars and cover long distances, for one, and rental companies do business with industrial operators which need machinery that currently can’t be made electric.

Hertz says it wants to accelerate its electric rollout rapidly, and it has the supply to do it thanks to its Polestar deal.

What will set the pace is demand from the public, and how quickly infrastructure can be scaled to handle a big EV fleet.

“We have the luxury of dealing with multiple landlords at multiple airports,” Mr Shaw told CarExpert. “There’s some challenges in getting infrastructure in.”

“For a fleet of our size, the challenge is going to be: how many chargers do you per car?” he said.

“Ideally as a private owner it’s one-to-one, but when you’re talking about multiple fleets is going to be one-to-three, one-to-five, one-in-12; some people think we can do one-in-20.”

Mr MacNeill said he expects market demand to move quickly.

“It’s really going to be our customers mandating, wanting, demanding an EV for their journey. We’ll have to supply them, and we’ll supply in the levels they demand. This is all about utilisation of assets.

“If those assets are utilised, then we’ll buy more of them. If they’re not, then we’ll cap them.”

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