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The economics of the rental car industry give companies including Avis Budget Group and Enterprise Holdings multiple reasons to go slow on the adoption of electric vehicles. Just think of how much money they make every time a renter forgets to return a car with a full gas tank. But on Monday, the rental car companies received the biggest reason yet to move quicker to EVs as part of their fleets. The deal between Hertz and Tesla for 100,000 vehicles is a signal to the major car rental companies that a strategy for EVs is going to be needed, and maybe sooner than they had planned on it.

It was not a surprise to auto industry analyst John Healy of Northcoast Research that Hertz is the first among the small group of major rental car companies to place a big bet on EVs. After an era of industry consolidation, the three companies represent as much as 95% of the car rental agencies at an airport terminal: Enterprise owns Alamo and National; Hertz owns Dollar and Thrifty; Avis combined with Budget. But it’s only Hertz that has offered EVs in any significant way to date, and its focus was limited to the niche market of luxury renters using its premium services such as Ultimate Choice.

“There hasn’t been a lot going on in electric,” said Healy.

That “ultimate” vehicle category offered consumers access to high-end electric cars from Porsche and Tesla, among others, but the numbers were at the level of a “few hundred” in the fleet versus the 100,000 Teslas in the Hertz deal. “They were trying to make money renting cars, not meet this niche,” Healy said of the main competitors. Hertz saw the affluent renter combined with an EV “intrigue” factor as enough of a reason to experiment on the margins of the business, “but nothing more than that,” Healy said.

Enterprise and Avis Budget did not immediately respond to requests for comment.

If demand hasn’t been there yet to justify a major spend on an EV fleet, the Hertz deal may be the signal that the time has come. But there are big economic hurdles for the rental car industry to overcome that are related to hesitation about EVs to date.

As Hertz prepares to re-IPO after restructuring under private equity investors and with former Ford CEO Mark Fields in as interim-CEO, the Tesla headline gives it another way to differentiate itself in a consolidated rental car space. But ultimately EV fleets are an issue the major rental car companies are all going to need to work through as part of sustainability commitments and new economic thinking.

Dan Ives, analyst at Wedbush Securities who covers Tesla, said the rental car fleets were always viewed as “untouchable” because of the scale of their bulk purchases. “The fact that Hertz dove into the deep end of pool and is spending over $4 billion, that was never even on the radar for the likes of a Tesla,” he said. But now it represents a tipping point not only in EV interest from the market but the supply that Tesla can produce with its factory operations expanding around the world and, within the U.S., to Austin.

The rental car industry represents 1.5 million to 2 million cars per year, a significant part of new sales. 

“For Tesla that is 2 million cars that were never on the radar,” Ives said.

Tesla reached a $1 trillion market capitalization on Monday after the deal was announced.

“This announcement is a clear signal from Tesla that they can deliver a large volume of vehicles,” Jonathan Smoke, chief economist at Cox Automotive, wrote in an emailed statement to CNBC.

Size of EVs for rental has been an issue beyond the luxury market with the sedans too small for most renters’ preferences, but that is changing with the production of more crossover EVs and other hybrid vehicles. The crossover utility segment accounted for 50% of EV sales in the second quarter.

While the carbon footprint of the car rental industry has not been a primary focus of the U.S. government, the pressure is expected to increase in the future and there has been talk among those who follow the industry, Healy said, that President Biden wants the rental car companies to commit to electric vehicle fleets.

“The government push is yet to be determined but it’s probably not going away,” Healy said.

The car rental agencies have sustainability in their business models, such as Enterprise’s carbon offsets program and a longstanding research affiliation it has in the biofuels area. Enterprise has reported on Scope 1 and Scope 2 carbon emissions for years, but not the scope 3 emissions that occur at the tailpipes of its fleet cars. Avis Budget also offers carbon offsets, carbon footprint estimates for corporate clients and cites its acquisition of car-sharing company Zipcar as part of its sustainability initiatives. Avis Budget reports 21,000-plus hybrid vehicles in its fleet globally.

Shareholders advocates focused on ESG have pressed the issue with Avis and Hertz. Shareholders asked Avis to purchase 40,000 EVs. A Hertz shareholder climate resolution in 2020 included EVs as part of a broader discussion on climate change. “Hertz’ standard rental car business currently has only three hybrid electric vehicle options at select locations for consumer rentals, with no all-electric vehicles. While Hertz has taken steps to improve energy efficiency for its operational facilities, the impact of the company’s fleet remains insufficiently addressed,” shareholder advocacy group As You Sow wrote in the 2020 measure.

Driss Lembachar, manager of transportation and infrastructure at Morningstar’s Sustainalytics ESG risk evaluation business, said car rental companies are less exposed to car emissions than automakers, given that the ultimate responsibility for emissions and meeting fuel economy standards from a regulatory point of view mainly rests with car manufacturers. But the fuel efficiency and age of a car rental company’s fleet and its renewal (or lack thereof) is material to investors since these areas impact its attractiveness and customer satisfaction/retention levels.

Sales in the U.S. of zero emissions cars continue to rise, with more than 168,000 zero emission vehicles (battery, plug-in hybrid, and fuel cell electric vehicles) sold in the second quarter of 2021, a 33% increase and 122,000 units more than the same period in 2020, according to industry trade group Alliance for Automotive Innovation. It noted Q2 2021 sales represented 3.8% of the auto market, their highest percentage ever. The auto industry is investing $330 billion in electrification by 2025 and it forecasts more than 130 zero-emission vehicles and 30 hybrid-electric models will be available in the next five years.

The upfront expense for the rental car companies from EV adoption, not only in the purchase price of cars, but in the build out of the charging station infrastructure they would need, have been major reasons for moving slowly, and the current economics of the rental car business makes staying with gas-powered cars attractive. Rental companies make money every time a car is returned without a full tank of gas, and while that represents only about 5% of total revenue, according to Healy, it is high margin revenue. While business models can presumably be developed to charge for “topping off” an EV, there is no established practice for that today.

That is one of the unknowns the rental car agencies are going to experience in a steep learning curve for fleet management with EVs. The timing of EV charging has to be taken into account as part of moving cars in and out of agency lots, and there are basic questions they still can’t answer: how many charging stations will they need, and how many will have to be fast-charging. It takes two minutes if not less to put gas in the car, but it could take hours to charge a car and that time differential could be significant in meeting customer demand.

Analysis of older EVs in recent years as Tesla customer service received scrutiny showed that they can present a unique maintenance and servicing profile. Hans-Werner Kaas, Senior Partner at McKinsey and Company, told CNBC in 2019 that fixes for EVs may be less frequent overall, but more expensive, and equipment including ride control and tires may require more frequent service or replacement due to the higher curb weight and acceleration of electric vehicles.

There are potential economic advantages that EVs may offer rental car companies. They could potentially save money on maintenance and the residual value of the cars hold up better. But all of the unknowns associated with unit economics on EVs have taken precedence over any potential economic benefits.

“Their view was that there is not enough infrastructure and no salivating custom that wants it, so why change anything?” Healy said. “There view has been ‘we will wait and see, but now is not the time.”

For Hertz, in process of coming back to the public market with an IPO, the timing is good for a big announcement related to its positioning versus competitors.

The major car rental agencies have tended to follow each others’ moves in recent history whether it is marketing approach or how they charge customers for various services, and with the space consolidated among the major three players, there will be pressure on Avis Budget and Enterprise Holdings to make moves in the EV space. That could be with Tesla, though they might be getting in line for deliveries behind Hertz, or the major automakers, including GM and Ford, planning to produce a large number of EVs in the years ahead. Rental car agencies have historically focused fleet purchases on the U.S. automakers before adding units from overseas.

“I would think Avis and Enterprise need to respond with something,” Healy said. “This has been a been copycat business for the last 50 years and that won’t change.” 

Ives cited a saying about the car industry, that with bulk orders there is never just one. “I would be shocked if the other competitors of Hertz haven’t put in calls to Tesla,” Ives said.

With a changing consumer landscape and more interest in EVs, the rental car agencies will risk losing business if they move too slowly. Healy expects more consumers in the future will be willing to pay extra to try an EV. “If I can rent a Tesla for an extra $40 a day at Hertz … and Avis doesn’t have it, I might try. … There is a customer who will respond to this and on the margins, Hertz is in a better spot.”

For Tesla, the deal is a good way to introduce consumers who have never driven an electric vehicle before to the technology, especially as the sales prices of EVs relative to traditional cars come down to a level where there is more room for mass adoption.  

“Every consumer that gets into a rental car car could be a conversion to a buyer … it’s an extended test drive,” Ives said.

If the rental car industry remains hesitant, it isn’t because the companies lack the money to spend on EVs. “The industry has never been more profitable,” Healy said. Amid the chip shortages that have limited car production, fleet size is only up 15% against demand that is now back up to 80-85% of the pre-pandemic level, according to Healy. The value of the cars on their balance sheets also have been appreciating in contrast to the typical depreciation they would expect in used cars.

The coming quarterly results should show record profitability and in the current market of high demand and limited car supply, the rental car companies are able to charge as much as double what would have been normal pricing in the past. “If you need the minivan in Florida you are going to pay $100 rather than $75 a day,” Healy said.

There also isn’t much else out there for these companies to buy even as their balance sheets are strong with the industry controlled by the three main players, making more consolidation less likely.

Healy said more changes are occurring across the auto landscape and beginning to get the focus from the businesses ancillary to the carmakers. He covers the auction space and noted that Manheim, the largest auction house, recently said in an investor presentation that it will retrofit 53 auction locations with 127 EV stations for charging and the diagnostic work on battery condition it needs to perform to properly assess the value of an EV up for auction. “We starting to see some change among adjacent companies in the industry,” Healy said.

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Review: DJI’s first 2,000Wh power station is here, and it’s built like a tank

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Review: DJI’s first 2,000Wh power station is here, and it’s built like a tank

DJI may be best known for drones, but the company just launched a ground-based product that has the power to keep all your tech airborne – and then some. The new DJI Power 2000 is a 2,048 Wh portable power station with a 3,000 W output that quietly muscles its way into the heavy-hitter end of the mobile power world. I’ve been testing it for the past week in a wide range of scenarios – from charging up my electric tractor in the field to power my family’s chest freezer. And of course smaller jobs like charging up my phone and drone are easy jobs too. From my experience so far, I can tell you that this thing delivers.

But before I get into all the praise, let me get my one gripe out of the way early: You can’t use the DJI Power 2000 until you pair it with the DJI Home app.

That step alone doesn’t take long, but I’m not a fan of products that require a phone connection to get started.

When I take a power station out of the box, I want to push a button and see juice, not start pairing like I’m connecting Bluetooth earbuds.

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With that said, once it’s set up, the Power 2000 makes a compelling case as the go-to portable power station for everything from remote camping to emergency home use.

It’s quiet. It’s fast. It’s powerful. And it might be one of the most rugged unit I’ve tested – which is a LOT of power stations by this point.

You can definitely tell that it’s built solidly, and I really like the 1/4-20 threaded inserts on the sides for mounting accessories – either those from DJI or others that I could possibly dream up.

Easily charging my KANDI Innovator electric UTV

Big power, fast charging

Let’s start with the headline numbers: 2,048 watt-hours of capacity and a continuous 3,000W output. That’s enough to run nearly any household appliance, including a microwave, power tools, or even charging up my electric UTV.

When I plugged in my Kandi UTV, the DJI Power 2000 didn’t even flinch. This would be a great way to recharge in the field if you ever accidentally ran low on power in the field. To put it in slightly outdated terms, it’s the equivalent of a little red gasoline can, but in the electric era.

As another “charging out in the field” test, I tried it out with my NESHER L880 electric loader. You shouldn’t ever run out of charge in an electric tractor as long as you’re watching your battery meter – but if you ever did, this would be a convenient way to get some charge back into it to drive home.

And as an added bonus, the NESHER L880’s loader bucket makes a great way to carry the fairly heavy power station around in the pasture.

It works great to charge my NESHER L880 electric loader out in the pasture

For ports, the unit features four AC outlets, four USB-A ports, and four USB-C ports (two at 140W and two at 65W), plus dedicated SDC drone ports and a DC car outlet. I also used it to power my chest freezer for a test – it ran smoothly for hours, simulating a blackout scenario where this could genuinely save hundreds of dollars in spoiled food.

Charging the Power 2000 itself is no slouch, either. DJI claims it can go from 0 to 100% in 90 minutes from a standard wall outlet, and my tests confirmed it. I clocked just under an hour to nearly 80%, which is pretty impressive for a battery this size. It also supports car charging and solar input – dual 1.8 kW fast charging if you have the right panels and setup.

Quiet, durable, and smart

What impressed me most beyond the specs was how thoughtfully rugged the Power 2000 is. It uses LFP battery cells (my favorite for safety and longevity), is built with flame-retardant materials, and can allegedly support up to one ton of static weight. While I didn’t park a car on it, I did load it into the back of my electric UTV and bounce it down a dirt trail and across many acres of pasture land. It kept powering devices without interruption, despite getting a decent workout and tossed around quite a bit.

DJI claims that the unit includes 26 built-in temperature sensors that provide constant real-time monitoring, along with 21 fuses to handle any operation abnormality. Those seem like weirdly high numbers, but sure, why not?

DJI also offers a Zignes 100W solar panel and a solar panel adapter, which I tested out for a solar charging setup. It’s not enough to fully recharge the unit quickly on its own, but it’s a nice bonus for trickle charging during daylight hours or topping off mid-campout. And of course you can bundle more solar panels to double or triple the charging power via DJI’s adapter, which can also mount to the side of the unit with the built-in threaded inserts in the side of the power station.

Solar charging feels like a cheat code!

Drone-friendly by design

As expected from DJI, there’s native support for their drone ecosystem. It’s a nice touch that makes this more than just a generic battery box – it’s clearly built for creators and drone operators in mind.

The system works to rapid charge DJI drones including the Air 3, Mavic 3, Inspire 3, and Matrice series. Of course I’ve got the one that doesn’t work: the Mini series. But that’s ok, since I was still able to charge it and the controller directly from the USB-C ports on the power station.

If the power goes out and you don’t want your chest freezer to thaw, the DJI Power 2000 can come to the rescue

Final Thoughts

At $1,299, the DJI Power 2000 isn’t the cheapest battery in town, but for the performance, safety, and sheer ruggedness it delivers, the price seems quite fair compared to other units in the market that don’t feel as well put together. This isn’t just a big battery in a plastic shell. It’s an industrial-grade power station built to handle your wildest overlanding trips, blackouts, and gear-charging needs with ease.

Would I recommend it? Absolutely. But I’d recommend DJI also rethink requiring an app just to get started. The Power 2000 deserves to shine on its own, right out of the box.

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Mercedes shows off upcoming VLE multi-purpose vehicle, driving from Stuttgart to Rome

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Mercedes shows off upcoming VLE multi-purpose vehicle, driving from Stuttgart to Rome

Mercedes-Benz continues to demonstrate the capabilities of its future lineup of all-electric vans and multi-purpose vehicles (MPVs), all atop its new 800V Van Architecture. Most recently, Mercedes drove two test versions of its VLE MPVs nearly 1,100 kilometers, from Germany to Rome, Italy.

While Mercedes-Benz remains a leading provider of vans, that is one of the few vehicle segments it has truly electrified. At least, not yet. Beginning in 2026, Mercedes intends to begin launching a new series of all-electric, ultra-efficient vans and multi-purpose vehicles on its new Van Electric Architecture (VAN.EA).

VAN.EA was unveiled in 2023 as a new 800-volt purpose-built EV architecture that will support both mid and large vans. These new models will feature 4MATIC AWD, significantly expanding driving range and ensuring the BEVs “meet the highest standards regardless of weather conditions.”

In the fall of 2024, we first looked at early camouflaged prototypes testing on public roads. One model, originally codenamed the VAN.EA-P has completed winter testing in Sweden and has since been renamed the VLE by Mercedes.

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The VLE and a second all-electric model called the VLS will be the first two Mercedes vehicles to hit the market atop the new Van Electric Architecture. Still, before then, the German automaker took two test models of the former through the Alps to Rome, only stopping to charge twice along the way.

  • Mercedes VLE
  • Mercedes VLE

Mercedes’ VLE demonstrates efficiency through EU

According to Mercedes-Benz, two VLE electric van test models recently completed a real-world trip from Stuttgart to Rome, covering 1,090 kilometers (677 miles) and traversing steep, winding mountain passes in the Alps.

The trip lasted approximately 13 hours and faced steady traffic. It began at Mercedes HQ in Stuttgart, Germany, where temperatures were 52°F, and ended in Rome, where temperatures were significantly higher at 91°F. Despite the long route and weather changes, Mercedes said the cabin temperature of each VLE remained comfortable at 72°F.

During the nearly 1,110-kilometer journey, Mercedes says the VLE vans only stopped to charge twice, completing sessions around 15 minutes each time. By completing the journey, Mercedes-Benz says it has confirmed the VLE is ready for real-world use and will bring space and efficiency to families and adventure seekers alike. Per Dr. Andreas Zygan, Head of Development Mercedes-Benz Vans, Mercedes-Benz AG:

Our future MPVs have once again impressively demonstrated their suitability for everyday use on the long-distance route. With just two short charging stops from Stuttgart to the Alps to Rome – the Mercedes-Benz VLE demonstrates impressive efficiency of the new Van Electric Architecture.

Mercedes said it will continue to test the VLE and its Van Electric Architecture in Stuttgart and in real-world environments en route to product launches in 2026 as promised. As mentioned before, two of those initial models have now been confirmed with the names “Mercedes-Benz VLE” and the “Mercedes-Benz VLS.”

The VLE can accommodate up to 8 seats and serves a multitude of purposes, from family-friendly transport to exclusive VIP shuttles. Like the VLE, Mercedes is hailing the VLS as a “Grand Limousine” that will “define a unique segment of its own that bestows true greatness to automotive luxury.”

Better yet, Mercedes says it will offer these all-electric MPVs or Grand Limousines for the first time in the US, Canada, and China. As we move closer to 2026, we expect to see more of the VLE and VLS inside and out, and learn more about the performance specifications and pricing Mercedes intends to deliver. Stay tuned.

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Toyota is still struggling to sell EVs so it’s back to gas-powered SUVs

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Toyota is still struggling to sell EVs so it's back to gas-powered SUVs

As it struggles to sell EVs in the US, Toyota is resorting to bigger, gas-powered SUVs. That new Toyota electric SUV we are still waiting on? It’s delayed again, but there’s more to it.

Toyota pushes to sell gas SUVs as EV sales slump

Toyota sold 1,223 models of the bZ4X, its sole electric SUV in the US, last month. That’s less than the nearly 1,400 it sold in June 2024 despite upgrading it for the 2025 model year.

Through the first half of 2025, Toyota has sold 9,249 bZ4X models in the US, down from the nearly 9,500 sold in the same period last year.

Its luxury Lexus brand is also struggling to sell its electric SUV, the RZ. Last month, Lexus RZ sales fell 30% to just 763 units. Through the first half of 2025, RZ sales are down by a third (-33%), with just 3,779 units sold.

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As the struggles continue, Toyota is now delaying more EV models as it shifts its focus back to gas-powered SUVs.

Toyota plans to begin producing a new electric SUV at its Kentucky plant in 2028, a year later than initially expected. The new EV was scheduled to be built at the automaker’s Princeton, Indiana, facility, following an additional $1.4 billion investment made last April.

Toyota-sell-EVs
2026 Toyota bZ electric SUV (Source: Toyota)

According to AutoNews, the sudden shift is to free up capacity for its massive gas-powered Grand Highlander SUV.

Toyota is consolidating EV production and will build the new EV in Kentucky alongside a separate three-row electric SUV. The larger electric SUV is set for production in late 2026, rather than earlier in the year as initially planned.

Toyota-sell-EVs
2026 Toyota C-HR electric SUV (Source: Toyota)

“As previously announced, Toyota plans to produce two all-new, three-row battery electric SUVs in the US. Toyota will now assemble both vehicles at Toyota Kentucky,” Toyota said in a statement.

Toyota will ramp up production of the Grand Highlander in Indiana with a new dedicated assembly line. Through the first half of 2025, Toyota Grand Highlander sales are 20% with over 65,000 units sold.

Toyota-bZ-Woodland-EV
2026 Toyota Woodland electric SUV (Source: Toyota)

Despite the delay, Toyota is still planning to launch seven new EVs in the US by mid-2027, including under the Lexus brand.

Later this year, Toyota will introduce the new bZ electric SUV (an upgraded bZ4X) with more driving range and an added NACS port to charge at Tesla Superchargers.

The smaller Toyota C-HR and rugged bZ Woodland electric SUVs are expected to arrive sometime next year.

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