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January 25, 2024
This executive summary is based on the article “‘Where Hertz Went Wrong With Its EV Fleet”, published by Yime CO2 Leadership Report and written by Justin Worland.
What is the message?
Hertz’s ambitious plan to incorporate electric vehicles (EVs) into its rental fleet faced a setback, as the company decided to scale back its EV fleet by selling one-third of it.
The unexpected move highlights challenges related to high repair costs for EVs, unmet consumer demand, and, significantly, the underappreciated issue of customer education.
ONE PAGE SUMMARY
What are the key points?
Initial Enthusiasm and Strategy: In 2021, Hertz made headlines by committing to building a massive EV rental fleet, purchasing 100,000 Teslas and launching an advertising campaign featuring Tom Brady. The move reflected the company’s anticipation of a growing market for EV rentals.
Shift in Plans and Challenges: Last week, Hertz announced a shift in its strategy, citing the unexpectedly high costs of repairing damage to EVs and lower-than-anticipated consumer demand. The decision underscores the complex landscape of transitioning to EVs in the rental market.
Overlooked Factor – Customer Education: The article emphasizes the less-discussed challenge of customer education in Hertz’s EV initiative. While surveys indicated consumer interest in EVs, the lack of knowledge about operating these vehicles posed a significant hurdle. Hertz’s attempts at digital and educational content, including the deployment of “EV ambassadors,” yielded mixed results.
Anecdotal Experiences: Personal experiences, including the author’s account of receiving an unexpected EV rental without proper communication, highlight gaps in Hertz’s customer education efforts. Despite valuable resources such as instructional videos and a dedicated website, lack of proactive communication left some customers feeling unprepared.
Unverified Success of Educational Programs: Hertz has not shared data on the effectiveness of its customer education initiatives, citing a quiet period before an upcoming earnings announcement. However, CEO Stephen Scherr had previously positioned customer education as a strategic move, emphasizing the importance of smart investments in readiness for the EV transition.
What are the key examples?
The author recounts a personal experience of renting an “intermediate” car from Hertz only to discover it was an electric vehicle, emphasizing the absence of communication about the change.
Hertz’s deployment of EV ambassadors and digital content, including instructional videos and a dedicated website, are cited as examples of the company’s efforts to educate customers.
Conclusion
Hertz’s decision to scale back its EV fleet serves as a cautionary tale about the complexity of transitioning to EVs in the consumer market.
Beyond the challenges of repair costs and fluctuating demand, the overlooked factor of customer education played a pivotal role in the setback.
The article underscores the broader lesson for companies undergoing energy-related transitions: effective customer education is crucial, requiring careful attention amid other operational concerns.
To read the original publication, click here.
