Although most of the angst and prognostication has focused on whether consumers will bite the bullet and buy electric vehicles (EVs) in 2011, it's quite likely that corporate fleets will take up a considerable amount of the early volume. Don't just take my word for it, talk to GE, AT&T, Hertz and many others. Corporate fleets are where the big early orders are coming from.
One of the first companies to get EVs on the road is Hertz, which is ordering cars from Tesla, Nissan, Smart, Coda, Toyota and more. The cars are going into Connect by Hertz car-sharing fleets on college campuses and in cities, beginning with New York -- where the Smart electric drive and other cars will be available as early as next week. Hertz has already gotten two chargers installed in Manhattan, but it plans more. Next up are Washington and San Francisco, with EV outposts in China and England to follow.
Why Hertz is going electric car-sharing
They're not talking EV numbers at this point, but Rich Broome, a company senior vice president, told me that being an "innovation leader" is important to Hertz. "We wanted a wide range of cars," he said. "A Tesla is different from a Smart which is different from a Nissan Leaf." The cars will be offered in different programs, and at different prices: The car-share vehicles will start at $6 an hour, but the Tesla will enter the premium collection rental program and go for approximately $100 a day, Broome said.
At the Hertz event, Coda spokesman Matt Sloustcher told me that his company, a partner not only with Hertz but also with Enterprise Rent-a-Car, envisions that 30 to 50 percent of its early volume will be in fleet sales, including to local, state and the federal government. Consumer marketing will be in California exclusively, and for that the company is renting mall stores.
Big government loves EVs
The federal spending is significant for EV sales. The General Services Administration (GSA) has said it will spend $287 million in stimulus funds to buy more than 17,000 fuel-efficient vehicles from the Big Three. The money will go to purchase: 7,924 Fords ($129 million), 6,348 GM cars and trucks ($105 million) and 2,933 Chrysler products ($53 million).
Enterprise is buying 100 Codas, which is a nice vote of confidence in a company that has delayed its first deliveries until the second half of 2011. "Fleets are paramount for the success of EVs," Sloustcher said.
The big headline, of course, was General Electric announcing that it would buy 25,000 EVs by 2015, including 12,000 Chevrolet Volts. No other company has matched that volume, but AT&T (an early buyer of Ford's electric Transit Connect) says that it will invest up to $565 million to replace 15,000 vehicles with alternative-fuel cars and trucks.
Connecting with Ford's Transit Connect
The Transit Connect is a fine example of this trend: Granted, it's a utility-oriented electric truck, but its early buyers are all corporate fleets. Ford said Tuesday it was rolling them out to AT&T, Southern California Edison, Xcel Energy, Johnson Controls, New York Power Authority, Canada Post and Toronto Atmospheric Fund EV300.
Some corporate programs will enable EVs without actually buying them. Starwood Hotels & Resorts said Monday it would partner with Connect by Hertz to offer car-sharing fleets at three different hotel brands, including Element, Aloft and Four Points by Sheraton. "Hertz provides the cars and the maintenance, and Starwood provides the space," said Julie McCaffrey, Starwood senior manager of global guest initiatives.
Jack Hidary, global EV leader at Hertz, told me that car-sharing programs of the kind the company offers are the best way to get large numbers of consumers behind the wheel of EVs. Because each car is shared by a lot of people, it should have more impact in familiarizing people with EVs than actual sales, which in the first two years will be measured in the thousands.
McCaffrey told me that Starwood plans to put its EVs out front in preferred parking spots, linked to targeted marketing, and that's great publicity for EV companies that need to increase their visibility quickly. The phase "EV" conjures up a consumer charging a car in his or her garage, but instead picture a corporate motor pool with logo-adorned cars parked in a row next to massed chargers. That's the way it's shaping up.