Shares in global car rental company shot up threefold after CEO Joe Ferraro and CFO Brian Choi said they are getting ready to absorb electric cars into its ecosystem “at scale”.
The shares jumped to a high of $US536 ($A718) before settling to around double the value it was trading at before the company’s latest earnings call on Tuesday (US time), when the comments were made. The company opened on Wednesday at $US311 ($A416).
The rapid market reaction follows hot on the heels of news that Avis competitor Hertz would buy up to 150,000 all-electric Model 3 electric cars from Tesla, another moment that drove the EV maker’s value to more than $US1 trillion, where it joined  the likes of tech companies Google, Alphabet and Microsoft.
“So we at Avis realized that the electrification of vehicles is where not just our industry, but the entire mobility ecosystem is eventually headed. And I think the bold move made by one of our competitors and that announcement is good for the overall rental car industry,” said Choi.
“It pushes pace and draws attention to what needs to be done to absorb electric vehicles at scale.”
Ferraro underlined that while the Avis group has had electric vehicles in its fleet in the past (in Australia only non-pluggable hybrids are available in an “eco-friendly category”), the company is committing to a 2030 target to reduce absolute greenhouse gas emissions from its operations by 30%.
“I mean having hybrids and electric vehicles is a large part of that,” said Ferraro.
Ferraro said that whilst the company has not yet made a public announcement about its electrification strategy, he thinks Avis will play a “big role” in the transition of transport.
“So you’ll see us getting more and more involved in that as time goes on. If you look now 2% or thereabouts of all cars manufacturer in the U.S. are electric, that number will go to about 10% in 2025 and maybe north of 30% in 2030. And we’ll play a big role in that,” he said.
According to further comments made by Ferraro, the company is looking at specifics such as which segments can they offer in electric drivetrain, at what price points they could be offered at, and how much they will cost to maintain.
We think Avis will be pleasantly surprised on that last one – in fact, it is highly unlikely the company is not aware that electric vehicles typically have much lower maintenance costs than cars with internal combustion engines.
Bridie Schmidt is associate editor for The Driven, sister site of Renew Economy. She has been writing about electric vehicles since 2018, and has a keen interest in the role that zero-emissions transport has to play in sustainability. She has participated in podcasts such as Download This Show with Marc Fennell and Shirtloads of Science with Karl Kruszelnicki and is co-organiser of the Northern Rivers Electric Vehicle Forum. Bridie also owns a Tesla Model Y and has it available for hire on evee.com.au.