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Hertz backtracking on EV rentals is not a surprise.
A year ago, before a vacation to see the eruption of the Hawaiian volcano Kīlauea, I found myself scrolling through my rental car options. A few users on the car-sharing service Turo offered up their Tesla Model 3s, and I was tempted by the idea of driving electric on holiday just as I would at home. One problem: There are no superchargers on the Big Island. I opted instead for a dependable, decade-old Hyundai Sonata — one that cost half as much per day.
An electric rental car is an easier sell in a big city with plenty of fast chargers. Even so, it appears that Americans at large are making the same choice that I did. Rental car giant Hertz made a big splash by adding Teslas to its fleet in 2021 and using NFL legend Tom Brady to advertise them. Now, instead of scaling up to 25% EV by this year as it had once planned, Hertz says it will sell off a third of its EVs because of weak demand and higher costs. The company plans to use the money to shift back toward more gasoline-powered cars.
I can’t say I’m surprised. EVs are, at least for this moment, an awkward fit for America’s rental car economy.
On the one hand, a rental is a great way for someone with no time behind the wheel of an EV to experience the reality of ownership. As a member of the car press, I got to test a Model 3 for several days before I bought my own. Believe me: A brief test drive from the dealership is nothing compared to what you’ll learn from puttering around in one of Hertz’s EVs for a few days, getting accustomed to its user interface and to the task of recharging. If you’re thinking about buying an electric car and you have a vacation in the near future, I’d encourage you to take the opportunity. An EV rental car is also an attractive option for lowering a vacation’s environmental footprint, since you’re probably already flying in a carbon-spewing airplane.
A rental car is also a good excuse to drive something fun or goofy. On a business trip a decade ago, I fulfilled a boyhood daydream by taking the bright red Jeep Wrangler and bombing around the San Francisco Bay Area with the top down (thanks, corporate card). A weekend car rental offers the chance to hop in a Tesla, which remains an usual or exotic experience in most places outside of California. However, Hertz’s struggles suggest that allure isn’t enough to overcome the higher cost of renting an EV. Especially when the bottom-dollar beater gets you where you’re going, if not in style.
The biggest issue, of course, is the fear of the unknown. Because so few Americans own a pure EV, renting one means learning a new driving paradigm — a chore, if not an outright headache. The last thing most people want to do while traveling to a conference in Boston or vacationing to the beaches of Los Angeles is to figure out how to put a Tesla into reverse or worry whether there’s a supercharger close to the hotel.
In truth, it’s not so bad. Once you’re inside an electric vehicle, the experience is built to be as idiot-proof as possible. Most modern EVs feature a big touchscreen with a map that will route you to available charging locations. The car will make sure to warn you, repeatedly, if it thinks you’re letting the battery get too low or straying too far from available chargers.
As much as the vehicle’s UI strives to inspire confidence, though, it’s easy to see why drivers who don’t already own EVs feel wary. The Biden administration’s big push may indeed expand America’s charging infrastructure. For now, though, there are still plenty of horror stories of people beset by busted plugs, slow chargers, long lines, or lousy interfaces. Vacation is supposed to be about decompressing, not range anxiety. Until chargers become much more reliable and get closer to ubiquitous, travelers will choose the known quantity: pump gas and put away the climate part of their brain.
That’s not to say EVs are doomed in the rental car market, or that tourists will forever spew carbon emissions from the backs of their battered Nissan Altimas and Honda CR-Vs. As Bloomberg reports, Hertz is paying close attention to GM’s attempts to revive the Chevrolet Bolt and introduce an electrified Equinox crossover as entry-level EVs in the low $30,000s. At that level, an agency could rent out EVs at prices more competitive with their traditional gas-burners. As EVs grow cheaper to rent and drivers grow more confident about charging, some of them will think hard about renting electric — especially in times of spiking gas prices. Perhaps a day will come when companies require their traveling employees to rent EVs instead of combustion cars as a way to keep costs down or to contribute to the firm’s green claims.
In the meantime, the question of rental EVs hovers in the same moment of uncertainty that clouds everything EV. Sales of electrics are not slowing, despite reports to the contrary. However the legacy automakers are seriously struggling with their electric transitions. Heatmap’s reporting has shown a major partisanship-based gap in EV buying interest, and that drivers in much of the country aren’t nearly as interested in buying electric cars as Ford and GM have suddenly become in selling them. The bad vibes are enough to make one wonder whether those living outside of large, EV-friendly large cities will ever embrace owning an EV, let alone become comfortable enough to rent one the next time they fly the family to Disney World.
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They may not survive a full challenge, though.
The Supreme Court allowed the Environmental Protection Agency to move forward with its rule restricting climate pollution from power plants on Wednesday, meaning that one of the Biden administration’s key climate policies can stay in place. For now.
The high court’s decision will allow the EPA to defend the rule in a lower court over the next 10 months. A group of power utilities, trade groups, and Republican-governed states are suing to block the greenhouse gas rule, arguing that it oversteps the EPA’s authority under the Clean Air Act.
The EPA’s new rules, which were finalized in April, would be the government’s first successful effort to regulate climate pollution from the power sector. The electricity industry is the second most-polluting sector in the American economy.
The Obama administration previously tried to regulate greenhouse gas pollution from the power sector. The Supreme Court blocked those rules from taking effect in 2016, before striking them down completely in 2022.
This time, the agency has written the rules within a framework laid out by the Supreme Court’s conservative majority in that ruling. In that now landmark case, the court ruled that the EPA could restrict greenhouse gas pollution from power plants only by requiring new technology, such as carbon capture equipment, to be installed at the plant itself. The agency couldn’t require utilities to stop burning fossil fuels and build more renewables.
In the near term, whether the Biden administration’s new attempt at regulating climate pollution will survive depends on the outcome of next month’s election. The Trump campaign has said that it will overturn the EPA’s new climate rules. During his first term, Donald Trump rolled back more than 100 environmental and climate protections.
Should Harris win, the rule will still have to survive the lower court challenge. That case is scheduled to be heard in front of the D.C. Circuit Court of Appeals this term.
“The high court made the right call,” Meredith Hankins, a senior attorney at the Natural Resources Defense Council, said in a statement. “Given its rulings in recent years undercutting environmental protections, the refusal of the majority on the Supreme Court to block this vital rule is a victory for common sense.”
Not all the news from the Supreme Court on Wednesday was good for climate advocates, though.
In the same decision that let the new rules stand, the high court’s conservative justices signaled that they might block the rules next year.
“In my view, the applicants have shown a strong likelihood of success on the merits as to at least some of their challenges” to the rule, Justice Brett Kavanaugh wrote in a short statement attached to the stay, which was cosigned by Justice Neil Gorsuch.
But because the rules don’t require utilities to start complying until next June, there was no reason to grant an emergency stay, the two justices added.
Justice Clarence Thomas would have gone further and stepped in to block the rules immediately. Justice Samuel Alito, another reliable conservative vote, did not participate in the deliberations.
That suggests that four justices could be ready to block the rules as soon as next year. They would need only one more vote — from Chief Justice John Roberts or Justice Amy Coney Barrett — to stay the protections from taking effect.
The statement didn’t provide any hints to what Roberts or Barrett are thinking.
Has Plug Power pulled the plug on its upstate New York facility?
In 2021, top elected officials in New York state promised that Plug Power, a nascent company in the growing hydrogen industry, would build a large hydrogen fuel production facility in the Buffalo-Rochester area. It was supposed to make the state an industry leader.
Today, the project is looking more like a warning sign about the perils of being a first-mover in the unproven hydrogen business.
It wasn’t supposed to be this way. Plug Power, an American hydrogen and fuel cell producer founded in 1997, believed it would capitalize on rising demand for the liquid fuel when it broke ground at its hydrogen production facility at Genesee County’s Science, Technology and Advanced Manufacturing Park in 2021, a project known colloquially as STAMP. Heavy polluting industries like steel and transportation were chomping at the bit to strike supply deals for hydrogen, a liquid fuel that produces no carbon when burned. And this New York plant would on paper be particularly attractive from a climate perspective: It would be powered by hydroelectric dams at Niagara Falls, offering a potential carbon reduction of an estimated 14,000 tons of CO2 per year. It would also be the largest project of its kind in the Northeast.
Three years later and the project appears to be on ice, according to a phone call recording between New York county officials and a real estate developer that was obtained by Heatmap News.
Construction stopped in January, per the call, as did work Plug Power promised to do on an electrical substation that will also power a neighboring semiconductor manufacturing plant. Now energy-hungry data center developers are bidding to pick up the substation work instead in exchange for a spot at STAMP and access to some of the remaining hydroelectricity, and county officials are looking at buying Plug Power’s electrical equipment.
It is unclear whether the hydrogen production plant will ever be completed.
“They’ve put things on hold and now we’re coming to pick up the pieces,” Chris Suozzi, an executive vice president at the Genessee County Economic Development Authority, told one bidder – PRP Real Estate Management – on a call last month. PRP taped the call and shared it with us after it was first reported by local news nonprofit InvestigativePost. Suozzi also said on the call: “They’re not ready to go. They’re on pause. We don’t know what’s going to happen with them at this point.”
The New York Plug Power plant’s problems should be familiar to anyone in the climate tech startup space but for the unfamiliar, the company’s rapid growth seems to have run headlong into struggles with cash. A year ago Plug Power said in an investor filing there was a “substantial” concern the company may not have “sufficient funds to fund [its] operations through the next 12 months.” So problematic are Plug’s financial woes that they’ve become a political target; after the Energy Department offered a $1.6 billion conditional loan commitment to Plug for building hydrogen production plants, Republicans in Congress called for an inspector general investigation into the move.
But the New York production facility won’t benefit from the potential loan either. We’ve learned from two sources familiar with the matter that the project is not included in its potential loan application currently pending before DOE.
Then there has been the rollout of the Inflation Reduction Act. Even though the project relies on carbon-free hydropower, it may not qualify for the IRA’s hydrogen production tax credit because of proposed requirements for fuel to rely on new renewable energy sources (known as “additionality”). This has been a major sticking point in implementation of the credit, and Plug Power is quoted in InvestigativePost last week linking the work stoppage at the production facility on waiting for the final regulation implementing the credit. This is even as the company uses the yet-to-be finalized credit in its financial analyses for other hydrogen facilities in operation today, like this one in Georgia.
Environmental justice issues have also been a drag on development. The native Tonawanda Seneca Nation is opposed to the entire industrial park because of the resulting impacts on wildlife, noise and the visual landscape. In April, the Fish and Wildlife Service revoked a necessary permit for a wastewater treatment pipeline that would be used by companies at the park.
Earthjustice attorney Alex Page – who is working with the Nation to fight the project – told me the tribe was told last year by the Energy Department that Plug Power had withdrawn the New York site from its loan application. The Nation will continue to fight the project and DOE’s loan financing to Plug Power on the chance that money could be reprogrammed to the industrial park. Page said: “The Nation remains very, very much opposed.”
We sent Plug Power multiple requests for comment as well as Suozzi. A representative for Plug Power declined to answer questions about the project. I got a text from a number listed for Suozzi asking to chat later, but I didn’t hear back before publication.
The week’s biggest fights around renewable energy
1. San Diego County, California – The battery backlash just got stronger after the city of Escondido, California, indefinitely banned permits to the entire sector in reaction to a battery fire last month.
2. Waldo County, Maine – The potential first floating offshore wind assembly site in America is now one step further in the permitting process, after Maine’s Department of Transportation released a pre-application alternatives analysis required for federal environmental reviews.
3. Dickinson County, Kansas – This one county may be a bellwether for future problems in Kansas, a state with many existing wind farms — and even more potential — but also a lot of opposition.
4. Washoe County, Nevada – The company behind the Burning Man festival will be acquiring nearby geothermal energy leases, in a settlement resolving litigation that had the high-profile naturalist escape challenging access to a renewable energy resource.
Here’s what else we’re watching right now…
In North Carolina, the Kerr Lake Solar project proposed by Cypress Creek Renewables is facing its own apparent local onslaught at community meetings.
In California, Capstone and Eurowind Energy are seeking permission to build a long-duration battery storage facility in Alameda County.
In New Jersey, a coalition of shore towns and opposition groups fighting the EDF-Shell Atlantic Shores offshore wind farm have issued a new missive criticizing state financial benefits to the project.
In New York, the town of Oyster Bay looks like it’ll be extending its moratorium on BESS for at least another six months.
In Pennsylvania, a Pivot Energy solar farm also has some local organizing in the way.