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Businesses are joining governments in nudging drivers to go electric. Here’s how
Posted by Talbot Payne on October 12, 2023
Grand Rapids — As governments push automakers to go all-electric or face fines over the next decade, companies are jumping on board the industrial policy bandwagon to incentivize consumer EV adoption.
Uber, for example, wants 100% of its drivers to be behind the wheel of an EV by 2030.
To incentivize EV adoption, the rideshare company’s Green Future program is offering drivers an attractive, $400-a-week rental deal for EVs like a Tesla Model Y; drivers like Matt Williamson, 40, from Allegan County south of Grand Rapids. Williamson has been renting Teslas for the last year.
“Gas prices were killing me,” said Williamson, who drove his own Acura MDX SUV before Uber sent him an email about EV rental opportunities. “I was paying $800 a week in gas, and now I’m paying about $140 in electric bills.”
Uber rents its Model Y to Williamson and other drivers through Hertz, one of the most aggressive companies pushing EV adoption with thousands of EVs in its fleet — and counting. Utilities like Michigan’s DTE Energy, which could see significant growth if its customers add cars to their electric bill, is offering EV tests and incentives. Reaction has been mixed, from Uber drivers saving gas to Hertz renters struggling with charging, to customers experiencing sticker shock.
“EVs aren’t for everyone,” said Williamson while connected to a Tesla Supercharger in a Meijer parking lot. “I live in a rural area — what are people going to do with a Ford Lightning? You can only tow 100 miles with it. But if you live in a city and have access to a DC charger or home charger, then EVs are the way to go.”
Three stalls down, Alexis Gonzalez, 43, plugged in his Tesla Model 3. He had just started renting for $354 a week.
“I got an email from Uber that said I qualified for the EV program since I have Uber Gold status,” he said. “So I thought I’d give it a try.” He had been paying $45 a day for gas in his Ford Taurus, and is now paying about $16 to fill up with electrons. Uber is also sending more business his way since his EV qualifies for higher-priced fares under the Uber Comfort electric service. Uber also gives drivers a $1-per-ride credit for using an EV.
Ride-share rentals are an important part of Hertz’s fleet business, and the company says 50,000 Uber drivers have rented an EV. Hertz says that electrics are cheaper to maintain, have better depreciation costs and earn the company substantial federal subsidies. The company also anticipates that cities will mandate Uber and Lyft be all-electric in the next decade. New York, for example, is requiring ride-share companies be all-EV by 2030.
“Hertz is investing in the largest EV rental fleet in North America,” Hertz CEO Stephen Scherr said last month in New York while donating EVs to city high schools for student training. “New York City (is) a natural accelerator for the most significant transformation that’s happened in the auto industry in a century.”
The rental company plans for 25% of its fleet to be battery-powered by the end of next year (330,000 vehicles) with models from brands including Chevrolet, Tesla, Polestar, Kia, Hyundai, Subaru and Volvo. Under the federal Inflation Reduction Act, many of the EVs Hertz purchases qualify for a $7,500 tax credit.
The company is encouraging its airport rental customers to go electric, too — including a free day’s rental for those who book an EV for two or more days. The experience, however, can be frustrating.
One of those customers is Mary Wilson, 70, of Louisville, Kentucky. A frequent traveler in Hertz’s President’s Club program intrigued by electrics, she arrived on a visit to Baltimore in 2022 to a sea of Teslas in the lot.
“I had never driven an EV before, and Hertz doesn’t give you any guidance,” she said. “I had no idea how to drive a Tesla. I figured out how to put it in Drive, but the annoying thing about Hertz is that it only had 50% of charge.”
Wilson drove the car to her hotel and found a common, 240-volt charger in a subway station next door to charge overnight. But she couldn’t find the Tesla’s charge adapter.
“You can’t get a Hertz person on the phone, so I eventually called emergency assistance and they guided me to the adapter, which was located in a space under the trunk. Fortunately, I had time to kill so I could figure this all out,” she said. Her problems continued on day two as Hertz had set the cabin temperature to 82 degrees. She couldn’t find the climate controls in the 15-inch touchscreen, so she drove with the windows down.
“I loved the car but I was annoyed at Hertz,” she said with a laugh. She subsequently rented a Polestar 2 EV in Palm Beach and Volvo XC40 Recharge in Baltimore and was further put off by the rental company’s requirement to charge the car to 70% upon return or pay a fee — a challenge given sparse charging infrastructure.
“But I now own a Tesla of my own in Louisville, and the rental experience helped me get comfortable with EVs,” she says.
DTE Energy sees EVs as an opportunity to grow its business. And as governments mandate carmaker fuel sources — like utilities — to be fossil-fuel-free, auto industry insiders see a natural alliance between utilities and manufacturers. To that end, DTE is offering a $1,500 rebate to eligible consumers who buy an EV — and rebates to businesses of up to $70,000 per DC fast-charger installation and $2,500 per 240-volt port.
DTE organized six “EV Ride and Drives” this year to get butts in seats. Over the weekend of Oct. 1, drivers could get into a Ford F-150 Lightning, Tesla Model Y, Chevy Bolt, Mustang Mach-E or Alfa Romeo Tonale plug-in hybrid for a three-mile test around Beacon Park in downtown Detroit.
Tiffany Walker, 43, of Inkster got behind the wheel of a Mach-E and an Alfa. She enjoyed the Mach-E’s electric ride and steering, but got a shock from the sticker price of the Ford EV, which crested $60,000.
“EVs are pricey!” she exclaimed. “They need to be more affordable, especially if they want to make everyone go green.”
She owns two gas-powered sedans, a 2016 Lincoln MKZ and 2014 Lexus 350, which she relies on for road trips to far-flung destinations like Washington, D.C., and Atlanta. She also balked at the Alfa’s $45k-plus sticker price, but liked the fact hat it had a gas engine that would kick in when the 30-mile battery range petered out.
“Electric to gas makes a lot of sense. It’s like having two tanks,” she said, though she has no plans to buy a hybrid. “It’s all about affordability. Folks on a fixed income will be priced out of the market by EVs.”
Like Uber and Hertz, DTE claims environmental benefits for EVs, saying that a driver in “Michigan reduces up to 70% of emissions annually compared to a driver of a gas-powered vehicle.” But Uber driver Williamson was less impressed by the green pitch than by the bottom-line benefits.
“EVs aren’t any better for the planet. Battery materials are being mined by slave labor overseas,” he said. “But I was paying over $5 a gallon for premium fuel to drive my Acura. For $175. I put a charger in my house and now I’m saving hundreds of dollars a week in fuel costs.”
Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.