Rental car company Hertz is shifting into high gear on the road to electric vehicles (EVs). Already, it has seen a 12% increase in yearly profits as the globe-spanning rental car company accelerates its transition to EVs and lower costs.
Hertz CEO Stephen Scherr reported $2.5 billion in revenue during a third-quarter earnings call, and in the same quarter, the company confirmed a deal with GM for 175,000 EVs, The Driven reported.
The revenue figure is in part explained by corporate demand for rentals provided by Hertz rising to 70% of pre-pandemic levels. But another key contributor was Hertz’ discovery that EVs are between 50-60% cheaper to maintain than gasoline-powered cars.
“We focused on operational excellence and fleet optimization to produce financial results that facilitated investment in our strategic priorities, like electrification, while enhancing returns to our shareholders and being in the service of our customers,” Scherr said in the earnings call.
There are fewer moving parts on EV vehicles than gas-burning cars, which means there are fewer failure points on components that can make for costly replacements.
Additionally, the less time a vehicle is receiving repairs at the auto shop means it’s spending more time on the road and thus has more opportunities to make money as a rental.
The deal with GM for more electric vehicles puts them on track to complete Hertz’ electrification goals. It is the biggest single uptake commitment of EVs by a fleet customer to date, following an earlier commitment to 100,000 Model 3s from Tesla.
Earlier this year, Hertz announced a partnership with Polestar to buy 65,000 EVs.
This signals that the growing trend of electronic vehicles on roads all over the world is likely to continue.
This is good news for the planet, as studies show that EVs create less carbon pollution than conventional gasoline-powered cars, even after accounting for energy expended to produce, transport, and charge them.
“And so I think, the open of that valve if you will, the supply of EVs to add to what we’re doing around Tesla, and Polestar, I think will be a positive, both in terms of customer experience and in the overall economic picture around depreciation, for our products set,” Scherr said.