How EVs are reshaping rental fleets
What Hertz's and Avis's electric-vehicle losses teach small rental operators about adding EVs — depreciation, charging, local demand, and how to avoid an expensive mistake.
Few stories capture the last two years in car rental like the electric-vehicle reversal at the top of the industry. Hertz sold off roughly 30,000 EVs and took about a billion dollars in related charges; Avis followed with a write-down of around $500 million on its electric fleet (Auto Rental News). The easy headline is “EVs were a disaster.” That’s the wrong lesson — and a costly one to copy. Here’s what actually happened, and how a small operator should think about putting electric cars on the lot.
What happened at the top
Hertz’s problem wasn’t that customers hated EVs. It was the maths of owning them. Sharp price cuts on new electric cars gutted used values, so the cars were worth far less when it came time to sell them. Monthly depreciation on its fleet ran to roughly $537 a vehicle — nearly double the level of two years earlier (Carscoops). Higher repair costs and pricier insurance made it worse.
Crucially, the chains didn’t abandon electric. They right-sized — selling down where demand and charging were thin, and concentrating the remaining cars in markets like California with high adoption and better infrastructure (Utility Dive). The mistake was buying tens of thousands of cars ahead of where renters and chargers actually were.
Why a rental EV is mostly a depreciation bet
For a rental operator, a car is an asset you rent out and then resell — and the resale price is a big part of your margin. EVs amplify that bet in both directions:
- Resale is volatile. New-car price cuts hit used values hard and fast, in a way that’s less common with established petrol models.
- Repairs and insurance can run higher, especially for battery or high-voltage damage.
- Charging is your customer’s anxiety, and therefore yours — range, charger availability and unfamiliar cars all drive support calls.
None of this means “don’t” — it means the economics are less forgiving, so they reward operators who go in with eyes open.
What’s different for a small operator
You have one structural advantage the chains don’t: you’re close to your own market. You don’t have to guess national demand or commit to 30,000 cars. You can add one or two EVs as a deliberate experiment and learn quickly.
Before you do, work through:
- Local demand. Are your customers asking for electric? Tourists in an eco-minded destination behave very differently from contractors needing a workhorse.
- Charging. Do you have reliable charging at your depot, and is there enough public charging where your customers actually drive?
- Depreciation. Model resale conservatively. If the numbers only work assuming the car holds its value, they don’t work.
- Pricing. Price in the convenience and the risk — and consider a slightly larger deposit given repair exposure.
When an EV makes sense in a small fleet
Electric tends to work when the use case is contained and the charging is sorted: a destination with good infrastructure and eco-conscious visitors, premium or novelty demand where the car itself is the draw, predictable local trips, or delivery-style rentals where you control the charging. It tends to struggle with long one-way trips, rural “charging deserts”, and customers who simply won’t risk range on holiday.
Treat every car as its own P&L
The real takeaway from the chains’ losses isn’t about electrons — it’s about discipline. They got burned because the asset side of the equation moved against them faster than the rental income could cover. The defence is the same whether a car is electric or petrol: track purchase, insurance, maintenance and depreciation per vehicle, so you know which cars make money and which quietly lose it.
That habit is exactly what we recommend from day one in how to start a car rental business, and it feeds directly into how you price your fleet. Get it right and an EV is just another line on the spreadsheet — one you can add, test and judge on the numbers.
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