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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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The Loan Programs Office is good for more than just nuclear funding.
That China has a whip hand over the rare earths mining and refining industry is one of the few things Washington can agree on.
That’s why Alex Jacquez, who worked on industrial policy for Joe Biden’s National Economic Council, found it “astounding”when he read in the Washington Post this week that the White House was trying to figure out on the fly what to do about China restricting exports of rare earth metals in response to President Trump’s massive tariffs on the country’s imports.
Rare earth metals have a wide variety of applications, including for magnets in medical technology, defense, and energy productssuch as wind turbines and electric motors.
Jacquez told me there has been “years of work, including by the first Trump administration, that has pointed to this exact case as the worst-case scenario that could happen in an escalation with China.” It stands to reason, then, that experienced policymakers in the Trump administration might have been mindful of forestalling this when developing their tariff plan. But apparently not.
“The lines of attack here are numerous,” Jacquez said. “The fact that the National Economic Council and others are apparently just thinking about this for the first time is pretty shocking.”
And that’s not the only thing the Trump administration is doing that could hamper American access to rare earths and critical minerals.
Though China still effectively controls the global pipeline for most critical minerals (a broader category that includes rare earths as well as more commonly known metals and minerals such as lithium and cobalt), the U.S. has been at work for at least the past five years developing its own domestic supply chain. Much of that work has fallen to the Department of Energy, whose Loan Programs Office has funded mining and processing facilities, and whose Office of Manufacturing and Energy Supply Chains hasfunded and overseen demonstration projects for rare earths and critical minerals mining and refining.
The LPO is in line for dramatic cuts, as Heatmap has reported. So, too, are other departments working on rare earths, including the Office of Manufacturing and Energy Supply Chains. In its zeal to slash the federal government, the Trump administration may have to start from scratch in its efforts to build up a rare earths supply chain.
The Department of Energy did not reply to a request for comment.
This vulnerability to China has been well known in Washington for years, including by the first Trump administration.
“Our dependence on one country, the People's Republic of China (China), for multiple critical minerals is particularly concerning,” then-President Trump said in a 2020 executive order declaring a “national emergency” to deal with “our Nation's undue reliance on critical minerals.” At around the same time, the Loan Programs Office issued guidance “stating a preference for projects related to critical mineral” for applicants for the office’s funding, noting that “80 percent of its rare earth elements directly from China.” Using the Defense Production Act, the Trump administration also issued a grant to the company operating America's sole rare earth mine, MP Materials, to help fund a processing facility at the site of its California mine.
The Biden administration’s work on rare earths and critical minerals was almost entirely consistent with its predecessor’s, just at a greater scale and more focused on energy. About a month after taking office, President Bidenissued an executive order calling for, among other things, a Defense Department report “identifying risks in the supply chain for critical minerals and other identified strategic materials, including rare earth elements.”
Then as part of the Inflation Reduction Act in 2022, the Biden administration increased funding for LPO, which supported a number of critical minerals projects. It also funneled more money into MP Materials — including a $35 million contract from the Department of Defense in 2022 for the California project. In 2024, it awarded the company a competitive tax credit worth $58.5 million to help finance construction of its neodymium-iron-boron magnet factory in Texas. That facilitybegan commercial operation earlier this year.
The finished magnets will be bought by General Motors for its electric vehicles. But even operating at full capacity, it won’t be able to do much to replace China’s production. The MP Metals facility is projected to produce 1,000 tons of the magnets per year.China produced 138,000 tons of NdFeB magnets in 2018.
The Trump administration is not averse to direct financial support for mining and minerals projects, but they seem to want to do it a different way. Secretary of the Interior Doug Burgum has proposed using a sovereign wealth fund to invest in critical mineral mines. There is one big problem with that plan, however: the U.S. doesn’t have one (for the moment, at least).
“LPO can invest in mining projects now,” Jacquez told me. “Cutting 60% of their staff and the experts who work on this is not going to give certainty to the business community if they’re looking to invest in a mine that needs some government backstop.”
And while the fate of the Inflation Reduction Act remains very much in doubt, the subsidies it provided for electric vehicles, solar, and wind, along with domestic content requirements have been a major source of demand for critical minerals mining and refining projects in the United States.
“It’s not something we’re going to solve overnight,” Jacquez said. “But in the midst of a maximalist trade with China, it is something we will have to deal with on an overnight basis, unless and until there’s some kind of de-escalation or agreement.”
A conversation with VDE Americas CEO Brian Grenko.
This week’s Q&A is about hail. Last week, we explained how and why hail storm damage in Texas may have helped galvanize opposition to renewable energy there. So I decided to reach out to Brian Grenko, CEO of renewables engineering advisory firm VDE Americas, to talk about how developers can make sure their projects are not only resistant to hail but also prevent that sort of pushback.
The following conversation has been lightly edited for clarity.
Hiya Brian. So why’d you get into the hail issue?
Obviously solar panels are made with glass that can allow the sunlight to come through. People have to remember that when you install a project, you’re financing it for 35 to 40 years. While the odds of you getting significant hail in California or Arizona are low, it happens a lot throughout the country. And if you think about some of these large projects, they may be in the middle of nowhere, but they are taking hundreds if not thousands of acres of land in some cases. So the chances of them encountering large hail over that lifespan is pretty significant.
We partnered with one of the country’s foremost experts on hail and developed a really interesting technology that can digest radar data and tell folks if they’re developing a project what the [likelihood] will be if there’s significant hail.
Solar panels can withstand one-inch hail – a golfball size – but once you get over two inches, that’s when hail starts breaking solar panels. So it’s important to understand, first and foremost, if you’re developing a project, you need to know the frequency of those events. Once you know that, you need to start thinking about how to design a system to mitigate that risk.
The government agencies that look over land use, how do they handle this particular issue? Are there regulations in place to deal with hail risk?
The regulatory aspects still to consider are about land use. There are authorities with jurisdiction at the federal, state, and local level. Usually, it starts with the local level and with a use permit – a conditional use permit. The developer goes in front of the township or the city or the county, whoever has jurisdiction of wherever the property is going to go. That’s where it gets political.
To answer your question about hail, I don’t know if any of the [authority having jurisdictions] really care about hail. There are folks out there that don’t like solar because it’s an eyesore. I respect that – I don’t agree with that, per se, but I understand and appreciate it. There’s folks with an agenda that just don’t want solar.
So okay, how can developers approach hail risk in a way that makes communities more comfortable?
The bad news is that solar panels use a lot of glass. They take up a lot of land. If you have hail dropping from the sky, that’s a risk.
The good news is that you can design a system to be resilient to that. Even in places like Texas, where you get large hail, preparing can mean the difference between a project that is destroyed and a project that isn’t. We did a case study about a project in the East Texas area called Fighting Jays that had catastrophic damage. We’re very familiar with the area, we work with a lot of clients, and we found three other projects within a five-mile radius that all had minimal damage. That simple decision [to be ready for when storms hit] can make the complete difference.
And more of the week’s big fights around renewable energy.
1. Long Island, New York – We saw the face of the resistance to the war on renewable energy in the Big Apple this week, as protestors rallied in support of offshore wind for a change.
2. Elsewhere on Long Island – The city of Glen Cove is on the verge of being the next New York City-area community with a battery storage ban, discussing this week whether to ban BESS for at least one year amid fire fears.
3. Garrett County, Maryland – Fight readers tell me they’d like to hear a piece of good news for once, so here’s this: A 300-megawatt solar project proposed by REV Solar in rural Maryland appears to be moving forward without a hitch.
4. Stark County, Ohio – The Ohio Public Siting Board rejected Samsung C&T’s Stark Solar project, citing “consistent opposition to the project from each of the local government entities and their impacted constituents.”
5. Ingham County, Michigan – GOP lawmakers in the Michigan State Capitol are advancing legislation to undo the state’s permitting primacy law, which allows developers to evade municipalities that deny projects on unreasonable grounds. It’s unlikely the legislation will become law.
6. Churchill County, Nevada – Commissioners have upheld the special use permit for the Redwood Materials battery storage project we told you about last week.