New technology means electric vehicles may be the way forward. Felicity Cousins asks what this means for the car rental market

Electric cars are finally in fashion. This year Nissan announced its plans to mass-produce the first electric five-door family hatchback, the Nissan Leaf, for the European market, and Renault will expand its zero-emission offerings with a range of electric vehicles.

These developments in car manufacturing have not happened overnight – the 11-year-old Renault-Nissan alliance has invested some e200 million a year on the research and development of electric cars. As with previous ground-breaking designs, such as the hybrid Toyota Prius, it won’t be long before business travellers will be seeing these new eco-friendly models on the fleets of car rental companies.

Andy Lewis, head of marketing and e-commerce in Europe, the Middle East and Africa (EMEA) for Budget Rent-a-Car, says: “In the next two years there will be a supply of electric cars from Nissan and Renault, and most of the major players will be heading in that direction. So from a rental perspective I expect these cars to be [in fleets] within two years.”

Avis has announced a partnership with both Renault and Nissan for electric cars to be available to its customers by next year, and Europcar, which piloted electric cars in Paris as early as 1999, confirmed it was pre-ordering 500 Renault electric vehicles (as well as the infrastructure needed to recharge batteries at rental points) for delivery in Europe’s largest cities from autumn 2011.

Hertz also has an agreement with Nissan for the Leaf to be introduced to its fleets in the US and Europe by early next year. In January Hertz also introduced a Citroën C1 Evie electric car to its car-sharing club, Connect by Hertz, in London’s Camden (see panel overleaf).

Electric cars have huge benefits for business travellers and companies looking to reduce their carbon footprints. They are carbon neutral – apart from the charging process – so fit in with the EU’s regulations on minimising emissions, and can be run for as little as e2 per 100km. But there are a few challenges, not least that even when they are fully charged, they only have a range of about 110km-160km, and charging stations are not yet widespread.

Budget’s Lewis says: “Electric cars make a lot of sense for short trips but more hybrid technologies will be best for longer journeys. The main issue for the mass introduction of electric cars will be the recharging infrastructure and the reach of the battery.”

Anthony Ainsworth, UK sales director for Avis, agrees.“It’s not a matter of plugging it in at home. Car rental users typically drive 110km-160km so they would need to have the infrastructure to support them,” he says.

At the end of April the European Commission launched its “European strategy on clean and energy efficient vehicles”. Commission vice-president Antonio Tajani says: “The strategy aims to achieve common standards for electric cars so they can be charged everywhere in the EU.”

Neil Cunningham, general manager of Hertz UK and European strategic projects, explains that there are currently about 200 charging points in London, which is not enough to support widespread use of electric vehicles, but this should change with the government’s “Plugged-in Places” scheme. This is a new £30 million initiative to provide 11,000 charging points across the UK in the next three years. The first three “plugged-in places” are London, Milton Keynes and the north-east.

Mayor of London Boris Johnson says: “Over the next 12 months Londoners will see 1,600 electric vehicle charge points being installed across the city. By 2013 this will become 7,500 and by 2015 we want 25,000 in place.”

The West Midlands, Cornwall, Sheffield, the Lake District, Greater Manchester and Northern Ireland have confirmed their intention to bid for funding later this year. Cunningham explains there are different types of electric car batteries, which will affect how long vehicles need to charge for. “The slow-charge batteries take about eight hours to be fully charged, and the quick-charge ones take about 20 minutes,” he says.

The batteries for electric cars are also very expensive (costly materials include nickel and cobalt). So how will this affect the price of renting electric cars? Budget’s Lewis says: “I don’t think we can say definitively yet but unless car manufacturers make electric cars affordable then they won’t take off. But if the end-user sees that it is going to cost them more to drive a petrol car, they will look for cheaper alternatives.”

As a result of EU regulations on carbon emissions – the fleet average to be achieved by cars registered in the EU is 130g of C02 per km – manufacturers have already produced more eco-friendly products, and this has filtered down to the car rental firms. The Avis Eco Collection’s most recent addition is the Volkswagen Golf Blue Motion, with a carbon emission as low as 99g of CO2 per km. Ainsworth says: “There are 100 or so on fleet at the moment and people can directly choose that particular car.” Avis offers its Eco Collection in 21 locations across the UK, mainly at airports, stations and major cities.

Hertz relaunched its Green Collection in June last year with 70 locations for hiring eco-friendly cars at airports and primary cities across Europe. Its fleet has an output of less than or equal to 140g of CO2 per km, with more than half the vehicles emitting 120g or less.

Lorraine Farnon, Europcar UK sales director, says: “Our customers can quickly make an assessment of the impact of their rental on the environment, as well as the fuel efficiency. Vehicles in the lowest emissions group emit an average 130g of CO2 per km. This typically includes mini three-door hatchbacks such as the Ford Ka.”

The Europcar green fleet is available in Belgium, France, Germany, Italy, Portugal, Spain and the UK, but not all car rental companies have a green collection. Lewis says the concept would not work for Budget. “Some of our competitors have actively marketed a green collection – we have chosen not to do that but it is partly because of the operational challenges. To be able to guarantee availability for a specific make and model at an exact location would increase costs,” he explains.

Budget has offered low-emission cars such as the Honda Civic Hybrid: “We found that even though there was a novelty interest and people were keen to try them, they wouldn’t if it cost them an extra £10 a day.” Budget also has bioethanol fuel vehicles, but only in Scandinavia. Lewis says: “Half the fleet in Sweden is the bioethanol type but the availability of that fuel and the infrastructure for it is not really in the UK yet.”

He adds: “There are accusations of ‘green washing’. Cars are not environmentally friendly. There are some that are less damaging but transport clearly has an impact and our desire is to minimise it in the interest of business. [However], it’s natural that our emissions have come down as manufacturers have reduced the emissions in the vehicles.”

So are people actually asking for green cars? Lewis says: “Individuals? Probably not, but our customers are being fed more green vehicles anyway [because of advances in green technology]. Corporates are definitely asking for it, and asking general green questions they may not have asked five years ago.”

Hertz’s Cunningham says: “People are very aware of [green options] and for our corporate customers it’s high on their agenda. There is not a corporate tender that comes in that doesn’t request green credentials.”

Europcar’s Farnon agrees: “In the past year Europcar has seen an increase in the number of business customers requesting smaller, more fuel-efficient vehicles. This is, of course, partly down to cost reductions but also to help [compliance with] green policies being introduced by more companies. Europcar’s vehicles are on average only six months old, and utilise the latest technologies to make them more fuel efficient.”

In recent years, the change in attitudes towards the environment has also helped the shift towards eco-cars. Budget’s Lewis explains: “A lot of the move towards greener car rental will be down to people’s social conscience. The products are out there. There is a general move towards the 3.8-litre engine, which is an indication that big, fat engines are not now so socially acceptable.”

The European Commission’s strategy for clean and efficient vehicles estimates that by 2050, electric vehicles could represent more than 60 per cent of new sales and constitute up to 25 per cent of the global car fleet. Whether this takes off among car users in general depends very much on a cultural shift.

Lewis says: “Vehicle supply and the mass introduction of electric vehicles will be prevalent in the next couple of years. I suspect [electric cars] will probably be a little bit like the internet and 3G mobile phones. They will be widespread, and over ten years the market will have changed dramatically.”

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Car sharing goes electric

Connect by Hertz has placed London’s lowest cost electric club car in Camden. The Citroën C1 Evie is produced by British–based Electric Car Corporation, and costs £3 per hour to drive. The price includes insurance, maintenance, cleaning and roadside assistance. The Citroën has a driving range of up to 95km per charge and, like all electric vehicles, is exempt from London’s congestion charge.

The facts

  • Globally, road vehicles generate one fifth of CO2 emissions.
    Widespread adoption of electric vehicles could halve these emissions.
    50,000 Nissan Leafs will be produced each year from the company’s Sunderland plant starting in 2013. The Nissan Leaf can go 160km between charges.
    Other electric cars to look out for include Ford’s plug-in version of the new Focus in 2011 and a “next-generation” hybrid in 2012.
    Toyota is building plug-in hybrids and fuel-cell vehicles to complement the Prius.
    BMW has made an electric-powered test Mini, and has similar intentions for the Concept Active E, a plug-in version of the Series Coupé.
    Audi recently debuted its second E-tron vehicle, the A1 – it can go from 0 mph to 62 mph in 10.2 seconds.