Converting a car rental’s fleet to electric vehicles : a feasibility study

Abstract

Purpose This dissertation seeks to assess the feasibility of introducing electric vehicles (EVs) into an existing passenger car rental company’s fleet. Design Initially, a comprehensive analysis of the case company (CC) was performed through interviews with key personnel from the CC. Moreover, its future outlook was assessed, and an expansion strategy was considered necessary. Three decision options were considered for the fleet expansion, either through the purchasing of conventional vehicles (CVs), EVs, or an equal mix of the two types of vehicles. Incremental revenue and expenditure was considered to form incremental projected profit and loss and projected cash flows from such project. Findings The findings from the interviews with key personnel from the CC, as well as relevant literature aided in determining relevant income and expenditure for the study. These formulated investment appraisal techniques for the three assessed decision options under the benchmark scenario and two additional scenarios. Conclusions This study concluded that it was presently unfeasible to switch the CC’s fleet to EVs. The most financially feasible option was to expand the CC’s fleet using CVs. Further to this, it was concluded that introducing a small number of EVs would be crucial for the CC to learn about what the inevitable switch to EVs entails, as well as attracting new, environmentally-conscious, customers. Value By leveraging insights from an established car rental company, the study offers valuable perspectives of the challenges and opportunities involved with integrating EVs in a car rental company’s fleet. The study urges policy makers to tailor existing incentives to further enhance the adoption of EVs, especially given the highly adverse results faced when considering the adoption of EVs.