EV Car Rental - where does Zim stand?

Author Name
Rugare Mukanganga
Markets 3 months ago

Automotive headlines this week featured a newly forged partnership between the American electric vehicle (EV) firm Tesla and Hertz Global’s car rental subsidiary Hertz Corporation. The deal will see Hertz ushering-in 100,000 Tesla Model 3 sedans in US and European markets from as early as November this year.

The US$4.2 billion deal is the largest single EV order to-date and it saw Tesla’s share price surpassing US$1,000 per share and its market cap breach the US$1 trillion mark –monumental by any standards.

Hertz’s 100k EV order brings to mind TSL Limited’s car rental subsidiary – Avis. In a trading update for the three-months ended July 2021, the Group noted an Avis rental day increase of 121%, signalling a recovery from FY20’s 54% decline and brighter car rental prospects in Zimbabwe. Looking at its rental fleet, all options showcased are either petrol or diesel based cars.

In the context of Zimbabwe, EV adoption data is unknown but consumer sentiment towards them gives an indication of market opinions of the clean energy vehicles. Areas of concern include:

  • Cost – simply put, EVs remain out of reach financially for the ordinary consumer in Zimbabwe. As a relatively nascent automotive sector, barriers to entry are quite steep, pricing-out a chunk of the local market.
  • Range anxiety or the lingering fear that a charged car will run out of power before one arrives at their destination. In a country with notoriously frequent power outages, range anxiety is heightened; more so with no known charging stations around the country to refill and get back on the road.

Going forward, it’s unlikely that Avis will invest in EVs for its Zimbabwean fleet. The “chicken-egg” problem is an underlying concern nationwide, where without an established network of charging stations on (at the very least) or along tarred roads, individual consumers and companies become hesitant towards EV investment.

Concurrently, State and private organisations in the transport and mobility industry are held back by equally significant concerns about setting up charging stations with little to no clear indication of EV adoption at consumer level.

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