EV Rental Cars Heading East
By Bill Moore
It was Horace Greeley, the 19th Century American newspaper publisher who counseled the young men of his age to "go west." Now EV Rental Cars in California is doing the exact opposite. They are looking east to expand their business of renting environmentally cleaner, more efficient automobiles.
In part one of his interview with EV World, Terry O'Day explained how the company began with a simple premise. The company founder, Jeff Pink, wanted to do something to reduce the air pollution that blanketed Southern California. That idea was to rent air travelers clean, efficient electric vehicles.
Along the way, EV Rental Cars learned that it had to adapt to a market that still wasn't completely comfortable with the notion of EVs and to technology that wasn't designed for operation in the rental car arena. So, adapt they did, evolving into a company that still offers renters products that are making a contribution to helping reduce pollution in California. Now they have introduced their cleaner car model into three East Coast cities.
But before talking about those operations, O'Day explained a little bit about who, typically, rents vehicles from his company.
Surprisingly, while some of renters are familiar with the company through various media, including EV World, he said, most customers convert to EV Rental vehicles after having made a reservation for one of Budget's conventional gasoline-powered car. "For those customers, they typically don't have any knowledge about the cars. Maybe they have an interest in the technology. Maybe they have an interest in the environment, or maybe they are just sold in the features of the car.
"Typically when those folks come back," O'Day continued, "we find that we have really dispelled some of their myths about electric vehicles and a lot of these folks will come back and say things like, ŒGee, I am so glad you talked me into doing this. It really made my trip memorable. This is something I can't do where I live. Now I've had the opportunity to try these cars. I've always heard about electric cars and always wanted to drive one. And I think they are great.'"
O'Day added that for the majority of his EV customers, renting an electric car was a positive experience. "People come back with either it's a permanent smile or it's a Œtorque' smile, I can't tell."
One thing is certain, O'Day commented, they quickly discover that EVs offer benefits and features not found in gasoline cars, including a quiet ride and brisk acceleration. They also learn these cars are different.
Shifting From EVs to HEVs
Despite the approaching ZEV mandate in California, carmakers aren't building battery electric cars at this time. GM has dismantled its EV1 assembly line, as has Honda line for the EV Plus, which now turns out Insights. Nissan only built a handful of its Altra EV. Ford is backlogged with its US Post Office EV order and DaimlerChrysler, according to all reports, ceased production of the EPIC.
So what does a company built around electric vehicles do when there are no EVs to replenish its fleet? It shifts its focus to hybrid-electric vehicles like the Prius and the Insight.
"We need volume in the rental industry to make the business case" and battery EVs only meet the needs of a small niche of renters, he stated. "We are moving to the hybrids. Hybrids have much broader market appeal. From a rental standpoint, it is a total no-brainer. It doesn't require much more than one minute orientation of the customer; and the customers love the hybrid.
"Some of our customers confess a wish for more power from the existing hybrids, but the models we have in the fleet now are really terrific cars for just about anybody."
Fewer Problems Than Expected
We asked O'Day what the biggest surprise has been for the company since it started renting electric vehicles a little over two years ago. He responded that the biggest surprise was how few problem rentals they have actually had. He had factored into the business plan he and Jeff Pink developed more stalled and stranded EVs than they actually handled.
"In developing the business case for EV Rental Car, I had assumed a certain number of rentals that would completely fail, that we would need to meet them with a tow truck and get them into a gasoline powered car. That number was far, far lower than we expected and I think its testament to the up-front orientation that we did, or the customer training at the rental counter. That was a pleasant surprise for us."
Of course, there have also been disappointments. The biggest for O'Day has been the lack of automaker commitment to building electric vehicles that his company needed in order to grow.
"When I say industry commitment, I am not placing blame on the automakers, but of number of folks that are stakeholders in the industry and that were required to make things happen," O'Day stated. He cited examples of insufficient charging stations and a lack of marketing and customer education. "Even the maps for the chargers that we had were almost altogether useless and we had to design our own from scratch. So those kinds of things that we had hoped that the industry would ultimately take over for us never really materialized and so drove up our costs more for the electrics."
Are Rental EVs A Vanishing Species?
All of the company's battery electric cars are leased from the manufacturers. When their leases expire, they will be returned. But with no new vehicles being built, EV Rental faces the very real possibility of not having any battery electrics in its fleet. O'Day told EV World that the current crop of "City EVs" simply don't meet their needs in an airport rental situation.
While some manufacturers have talked about refurbishing and re-leasing the cars to EV Rental, it is by no means certain that sufficient numbers EVs will be available to the company at the end of the current lease cycle. Fortunately, O'Day pointed out, the company rented its cars relatively late, giving it a little more breathing room until it becomes apparent how automakers will respond to California's ZEV mandate commencing the Fall of 2002. The oldest EV1 in the fleet was leased in 1999 and so has another year to run before its lease expires. O'Day is also hopeful that the nine Generation One EV1s that GM recalled will be returned to service, giving them another three years of useful life.
Given the fact that only a handful of battery EVs are available and that car makers won't let them operate outside of California (and Arizona in the case of the EV1), EV Rental Cars new offices in Pittsburgh and Philadelphia in Pennsylvania won't be renting any EVs. O'Day also noted that none of these cities have a public charging infrastructure, which is needed before any EVs can be operated successfully.
However, he added that he's already gotten calls from disappointed people inquiring as to whether or not battery EVs will be available in these new locations.
"I think the market's there and I know folks are interested in seeing battery electric cars on the road and they want to drive them even in those markets where they are not already available."
The company also has seven offices in California (SFO, LAX, BUR, SAN, PSP, ONT and SMF) and one office in Phoenix at Sky Harbor Airport.
If customers are disappointed that EVs won't be available outside California, they apparently are very excited about the availability of gasoline-electric hybrids, which O'Day believes the company can easily take nationwide "at the drop of a hat."
But as in the case of the battery EVs, hybrids are currently in limited production and this is slowing down EV Rental Car's expansion plans. Just like many consumers, EV Rental has to wait in line to get its cars, as well.
Which is the more popular of the two models currently available? O'Day said that initially the company had only Honda Insights and they proved so popular, they couldn't get enough of them in stock. With the introduction of the Toyota Prius, O'Day is seeing more interest in this vehicle than the Insight. He believes this is because it meets the needs of more airline travelers than the two-passenger Insight.
Currently the company rents about 120 vehicles a day across its ten locations.
If It's Not Electric, It's a Gas
Given the long waiting line and limited production numbers for both the Prius and the Insight, EV Rentals has turned to two natural gas-fueled vehicles to round out its cleaner car fleet. The Honda GX has a range of about 200 miles on a tank of compressed natural gas, while the Ford Crown Victoria gets between 135 and 150 miles or range.
To its credit, EV Rental Cars has avoided ordering supposedly duel-fuel vehicles which can burn either gasoline or an alternative fuel like CNG or propane or E85 ethanol.
"We made the decision early on that we would not go with dual fuels or bi-fuels. That decision is based on the simple fact that in putting these cars into the hands of customers and even into the hands of Budget Rent-a-Car's staff, we know they'd get filled up with gasoline and only run on gasoline ever. I don't think this is an issue only in the rental car industry," O'Day surmised. "I think that it's a problem with bi-fuels and dual fuels and we didn't want to be a part of that." High Consumer Interest in EV Technology
O'Day and his colleagues at Budget and EV Rentals daily interface with the general public and as such have a pretty good feel for what the traveling public thinks about EVs and HEVs.
"Consumer interest in EVs continues at high levels from out perspective," O'Day stated. "Still, many folks are not ready to make a financial commitment to buying cars, but renting cars is a much lower commitment and it's a good way to express your interest in the technology or the environment or to just try out these cars before you buy them. We see ourselves as building the market for EVs by building on people's existing interest in the car. So, while there is definitely interest, I can't say how many folks turn that interest into a commitment to buy cars. But, we're certainly talking them into committing to rent the car. That's the first step towards buying the car."
For the immediately future, EV Rental Cars plans to continue to focus on airports for its rental locations. "In five years we're hoping we can be a major rental car company. At that time we would merge or may buy another rental car company, or essentially grow into independent locations in local markets. And we'd like to make the battery electric a part of our future, but really only if the major automakers make them and the cars that are out there are FMVSS-certified, because without that certification we face a liability in our core market. In the interim we are going with the cars that the automakers are building. We're going with the hybrids, natural gas and when they come out with battery electrics, we'll be doing that also."
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