Chapter 2 - Renting Electrical Vehicles for a Competitive Advantage Flashcards
What happened to Hertz Global Holdings in 2020?
Due to the pandemic, they wre headed straight for bankruptcy as people were not allowed to leave their houses so they were losing money. They filed bankruptcy and had to sell 180,000 vehicles from its feet.
What happened to Hertz in June 2021
They emerged from the pandemic and the bankruptcy, however they were in a difficult position as they had sold all their cars meaning they had less supply and more demand, now having to try and figure out what vehicles they would get to rebuild their capacity.
In the first quarter of 2022, what percentage of EV sales accounted for new car sales in the 19 countries observed.
5%
In the first quarter of 2022, what percentage of EV sales accounted for new care sales in Canada? How many vehicles did this account for?
7.7%. 26,000 vehicles.
What is the tipping point?
The point at which an evolving situation becomes irreversible. At that level of market saturation, EV’s have gone from a rarity to a daily sighting.
Describe the societal pressures on the rental car business
The demand for electric cars suddenly shot up one day. Individuals were intrigued and had a desire to try using electrical vehicles. 60% of the clients stated that their positive experience with the electrical vehicle when they rented them. It allowed the users to get an idea if the EV was right for them, if they could get to where they wanted to go, etc. They are also called upon the population and society to be more environmentally friendly, which they are able to achieve by using electrical vehicles.
Describe the political/legal pressures on the rental car business
In December 2023, the federal government issued a draft regulation that would prohibit the sale of new gasoline powered cars after 2035, creating a mandate shift towards electrical vehicles. There are many concerns however regarding these ideals as high price tags, lack of charging stations.
What is the federal government statistical goal regarding the EV transition?
20% of cars sold in 2026 to be EV
60% of cars sold in 2030 to be EV’s
All cars sold in 2035
Describe the economic pressures on the rental car business
Rental cars tend to keep new cars from 2 to 4 years old, meaning they buy 25% to 50% new cars each year, but this has been impacted by supply chain issues and shortage of chips. Thus these rental car companies shifted to electric vehicles to reduce cost and place premium prices.
Describe the technological pressures on rental car company’s
1) The ability to charge the electric vehicles.
2) Compant agents and mechanics must be trained in EV, where there is little standardization in the industry and the learning curve is quite steep.
What was Hertz response to the different pressures.
The responses to different pressures was
1) They are leading the competition in electrical vehicles
2) ordered 100,000 Teslas in 2021
3) Ordered 65,000 Polestar Sedans
4) Ordered 175,000 EV’s from GMC
What was the statistics for the Turo company marketplace from 2014 - 2021 with respect to the number of Teslas and the number of electric vehicles?
Teslas 2014: 70
Teslas 2021: 21,000
All EV’s 2014: Less than 200
All EV;s in 2021: 27,000
How is the government responding to concerns about the availability of electrical vehicles?
5,000 sales incentives, and investing 400 million in EV infrastructure by March 2027.
What did Hertz report in 2021 regarding economic trends to their investors?
Signalled to investors that it would enhance its bottom line by:
1. Electricity is less expensive than fuel
2. Maintenance is cheaper
3. Customers are willing to pay more.
What was the profit expectation of the Canadian car rental industry in 2022?
5.8 billion.
