Welcome to the first Financial Fridays session of 2023. Over the past two years we have explored certain key financial aspects of the numerous shared mobility business models by interviewing leaders within the industry. From sharing to subscription to integrated MaaS and electrification, our discussions are centred around operations management, utilization, EVs, customer loyalty and retention, factoring tech costs and insurance related pointers (to name a few) while learning innovative best practices from across sectors.
In this session the panel discuss how car rental and carshare operators can electrify their fleets and the benefits of doing so.
Watch the full webinar below! Keep reading to learn more about each guest panelist and a brief summary of our latest #FinancialFridays discussion!
Financial Fridays: The benefits of electrifying car rental and carshare fleets
Meet The Panelists
Head of SaaS Sales North America at UFODRIVE
Nick is accelerating the transition to sustainable mobility with technology to lower operations costs, maximize fleet utilization, and improve the end user experience.
He formerly worked at Wunder Mobility and TSD, where he launched game changing products for car sharing, electric mobility, OEM, and rental operations.
As Strategy Development Director, Electric Vehicles and Infrastructure, Damon and his team are charting the transition to clean mobility in North America and Europe. Before joining Enterprise, Damon led zero emission mobility professional services for Burns & McDonnell in California, where he was responsible for light, medium and heavy-duty transportation electrification projects across utility, municipal and vehicle OEM markets.
Summary Of Financial Fridays Panel Discussion
How is your business approaching vehicle electrification?
Enterprise is a diverse mobility business. Among their lines of business there are modes that are easier to electrify than others and different approaches depending on the customer. The company consists of two major parts; car rental and fleet management. When it comes to electrification, the most important things to consider are vehicle suitability (range, duty cycle, whether the vehicle is fit for purpose) and the corresponding charging infrastructure.
The big challenge car rental users face is the access to power, which is going to be very important when EVs reach a higher penetration rate. This will be particularly true at locations such as airports where several megawatts of power will be needed all at once during peak rental times. This has been a major focus of conversation that Enterprise has been having with multiple stakeholders within the industry.
On the fleet side there are nearer term opportunities with regards to depot based vehicles, in which Enterprise plays the role of trusted advisor to their customers. Not just delivering charged vehicles to their customers but also taking them through the whole lifecycle of electrification starting with the ‘why’ and the ‘how’ and arriving at a sustainable operation that yields a positive Total Cost of Ownership (TCO).
UFODRIVE is the all digital, all electric car rental experience that has launched in 18 locations across Europe and most recently centers in San Francisco and Austin in the US. Soon they will be launching in Boston, New York, LA, Chicago and Miami.
UFODRIVE have zero lines, no paper work, no upsells and no car keys – just an upscale EV rental experience. They have proven that by connecting EVs to the drivers, the operations team and to the grid, and automating the processes between them with AI, they have produced major improvements, profits and efficiencies to the rental businesses that they support. UFODRIVE has their own consumer centers and also help rental companies like Hertz, Merchants Fleet and others with their SaaS platform to accelerate their electric and shared mobility adoption.
Why are passenger fleets trying to electrify? What are the benefits?
There are distinct differences between the B2B side, fleet management and the B2C rental side. On the fleet side, clarifying the reasons for electrification is the first priority because the outcome can change depending on the reasons. For example if there is an environmental driver, policy has been an enormous catalyst for creating and incentivizing these changes.
Fleet owners see the trend and realize that they have to adapt to a future that will be electrified. There are also business reasons for adapting that are economic in nature as well and fleets owners may find opportunities for lowering user costs and still obtaining a positive TCO. Fleet composition is something else that needs to be made upfront as well as spec-ing the right kind of charging infrastructure to make sure its suitable for the new fleet.
On the rental side, it’s a little more complex. The main difficulty is charging anxiety for drivers more than anything else. Even if facilities are outfitted with the right kind of infrastructure, the question is ‘how ready is the charging infrastructure in public to support the customer in a positive way?’
More than half of all consumers who intend to purchase a car in the next 24 months will choose an EV or a hybrid. The good news is that once rental operations are live with EVs on the UFODRIVE platform, the numbers are fantastic. The two main issues with mass adoption is charger supply/availability and fleet availability. For both small and commercial fleets, the timing is right for them to get started on their electrification journey.
What has been the general consumer opinion on electric vehicles within carshare and rental fleets?
EV rental demand is steadily climbing on a regional level. In states like California registration of new EVs is climbing above 16% or a national level it’s around 6%. So we need to take into account where EVs and users will have the greatest success.
Customers are also making decisions based on their own point of view and the level of confidence they have in the product. This comes down to predictability and reliability of the service. You also can’t undervalue the learning experience that people have when jumping into an EV for the first time. It’s important to make sure they are prepared to understand the differences before you offer them an EV rental.
There is also still a price parity on rental sites. Usually EVs are much more expensive. Hopefully this will change once there is more of a mix of vehicles allowing users to find the right price point for their needs.
Part of the advantage of electric vehicles is that they are also connected vehicles. At UFODRIVE if any customers have a question it can be answered right away. The team can turn on the AC for users or even pop the trunk if it’s required – so electric vehicles can provide a higher level of service to customers.
A current challenge that we will see go away over the next few years is the EV user interface. It keeps getting better and better and companies like UFODRIVE help to bridge that gap with the customer service staff.
How can technology elevate the electric vehicle experience?
Next generation vehicles are all connected, which will be vital as we move towards autonomous transportation. Right now, the charging infrastructure both on premises and off is largely open to connectivity and standards are being adopted so there is more optimization in the charging of electric fleets. We need to get as many miles out of EVs on the road today as we can, for the environmental and the cost benefits. The intelligence of fleets are really growing at enormous magnitudes, including the levels of optimization.
Something that is not always recognized is energy efficiency. Not all EVs are equally efficient in the way that they consume power and their ability to transfer energy back to the grid. This is a closed loop ecosystem that will help support itself.
The safety technology that is coming through ADAS may not be as exciting as other technologies, but this driver assistance technology is really helping to save lives and help educate drivers on the roads.
In terms of policy and regulation, how is the topic of charging infrastructure being dealt with?
In terms of policy and regulation, the efforts that have been made to date have largely been very good, especially if you look at what’s been happening between 2015/17 to 2022. However it’s infrastructure has been woefully underfunded. As EV adoption continues to grow, the problem is that there won’t be enough public infrastructure to support this growth, especially for those who don’t have a garage or own a property.
If federal US goals are met and EV penetration reaches 44 million EVs on the road by 2030, it will require 1.2 million charging points and the US currently have 160 thousand. There is a lot of work to be done over the next eight years.
When it comes to the standardization of charging infrastructure a lot of work needs to be done in that area as well. Connectivity is also possible within infrastructure but it varies partner to partner. Ideally, the user should be able to find a charging station when using the vehicle. However, a step up would be the ability to know whether a charging point is available within that station, at what rate you can get your vehicle charged and much more.
What subsidies and rebates are available for car share fleets?
UFODRIVE have worked with clean cities and clean fuel organizations on a regional level, who are partnering with energy suppliers to have incentives in place for fleets. There are also great programs in place to provide equitable electric transportation to underserved communities. However, more subsidies are needed on a federal level where universal standards are incorporated.
On the infrastructure bill and IRA, we are at the very beginning, the funding is just starting to happen. We are looking foward to seeing these bills rolling on and how these will be implemented in the future.