EV Rentals Off to Shaky Start on Continued Range Concerns (TSLA) (HTZ)
Last month, Hertz Global (NYSE: HTZ) announced that it was adding Tesla's Model S sedan to its lineup. The news was a positive for the company and the electric vehicle (EV) segment as a whole, with one of the world's largest auto rental outlets showing it was willing to take a risk.
However, Bloomberg noted over the weekend that customers are still a little leery of vehicles running solely on battery power. One rep for Hertz peer Enterprise Holdings told the publication that
People are very keen to try it, but they will switch out of the contract part way through ... Range anxiety makes them think they can’t get to a charging station.Enterprise rents EVs for 1.6 days on average, versus six days to a week for conventional, gasoline-powered vehicles.
There are Tesla's at two Hertz sites right now -- Los Angeles and San Francisco, California -- and the Model S rents for about $500 per day as part of the company's Dream Cars program. Enterprise also offers the Model S for $300 to $500 per day as part of its Exotic Car Collection fleet.
If you don't want to shell out $500 per day for a Tesla, you will end up with Nissan Leaf or something similar. While the Model S gets about 300 miles on a charge, other EVs will run for about one-third that before needing to be plugged back in. That doesn't quell consumer fear.
hertz will likely expand its Tesla offerings to where demand is first. Customers willing to give the car a try can do so relatively cheaply and, if this go awry, can just turn the vehicle back in. As more and more people rent EVs and see what they are capable of, the sky might then be the limit for Tesla.
Until then, shares will be ones to watch over the next year or two. The stock is down over 2 percent early.