Hertz is buying 100,000 Tesla electric vehicles by the end of 2022 and making up to 50,000 of them available for rent to Uber ridesharing drivers in the United States starting on November 1st. Initially, workers in Los Angeles, San Diego, San Francisco, and Washington, DC will have the option of paying $334 per week (eventually dropping to $299 “or lower”) for a package that includes a Model 3, insurance, and maintenance. The program will expand across the country in the “following weeks.” To be eligible, drivers will initially need at least a 4.7-star rating and 150 trips. The program will expose people to electric vehicles, many of whom cannot afford to buy an electric car of their own.

The Hertz Tesla order is reportedly worth $4.2 billion for the fleet and represents about a 1/10th of what Tesla can currently produce annually. Hertz purchased well-appointed, rather than base model versions, and paid nearly the full list price for each unit. Hertz is supposedly building its own charging infrastructure and plans to go nearly fully electric with its half-million vehicle fleet.

UBER drivers will benefit from gasoline savings and higher earnings potential due to Uber’s Green Future Program, which provides incentives – such as $1 more per trip up to $4,000 annually – for drivers to transition from gas-powered vehicles to electric vehicles. They will also have access to the Tesla Supercharger network and to Uber’s exclusive EVgo discounts. Because of the incentives, UBER claims that the cost will be comparable to renting a gasoline vehicle. Electric vehicle maintenance costs are lower because they have fewer parts than internal combustion vehicles and they do not need oil changes. But while electric vehicles have low operating costs, Uber drivers might actually make less money if they have to spend time searching for charging stations and recharging their batteries.

In 2020, Uber pledged to convert its entire ride-hailing fleet in the United States, Canada and Europe to electric by 2030. Lyft made a similar pledge. Both companies are pressing lawmakers to advance electric vehicle provisions included in the reconciliation bill (Biden’s “Build Back Better” bill). Currently, the act includes an expansive clean energy tax bill that would increase electric vehicle credits. If passed, it could cut the price of some battery-powered cars by as much as a third for certain purchases, making them cheaper than some combustion-engine automobiles. The high price of electric vehicles and the lack of charging options in urban areas are considered by both Uber and Lyft as two of the primary obstacles to meeting their pledges, which is why they support the subsidies in the Biden bill.

The recently signed infrastructure bill, however, should help with charging stations as it provides $7.5 billion for electric vehicle stations and the same amount for electric buses.

Incentives in the Proposed Reconciliation Bill

For electric cars that are assembled in the United States with union labor and U.S.-made batteries, consumers would receive up to $12,500 off their taxes. A car not made in the United States will still be able to get up to $7,500, which is the current provision. The credit in Biden’s Build Back Better bill, however, will be refundable, meaning that the Internal Revenue Service will provide the difference between the credit and the person’s taxes if the taxes fall short of the credit. The credit may also be transferable—meaning that car companies could offer potential buyers the tax credit right at the dealership instead of waiting until the next year to file taxes. For example, a Chevy Bolt could be cut in price from $34,000 to $21,500 at the dealership.

The base amount of the credit remains $4,000, as it is today, with another $3,500 available if the electric vehicle’s battery pack includes at least 40 kilowatt-hours of capacity. In the case of plug-in hybrids, the gas tank cannot exceed 2.5 gallons for cars placed in service before 2027. Electric vehicles and consumers will be able to qualify for another $4,500 in the tax credit if an automaker makes the electric vehicle in the United States with a union workforce. Another $500 is added for automakers using a U.S.-made battery, for a maximum of $12,500. Today, the only cars that would qualify for the full proposed credit are the Chevrolet Bolt EV and Bolt EUV.

There are other bill stipulations. The benefit could only be used on cars that cost up to $55,000 and vans, trucks and SUVs with a manufacturer’s suggested retail price of up to $80,000. There are income limitations too. Single filers with adjusted gross annual incomes of $250,000 or more, or joint filers with adjusted gross annual incomes of $500,000, will not be eligible for the full credit.  This recognizes the current demographics of electric vehicle buyers, whose income at $150,000 is more than double the median income level in the United States.

The average cost of a gas-powered car is around $35,000; the average cost of an electric vehicle is higher at $55,000. Note that the incentive would cut that difference in more than half. Also, manufacturers would be under pressure to make their cars less expensive to qualify for the credit. Plus, because electric vehicles cost less to run, some of the cost difference is canceled out on operating costs.

For electric vehicle tax credits, Tesla and GM are maxed out under current law, but the Build Back Better bill would again open the door to Tesla’s and GM’s eligibility. The changes would keep the credits open for 10 years, with eligibility for any electric vehicle in the first five years. During the last five years, the credits would only apply to U.S.-made electric vehicles.

Some car companies, however, dislike the requirement that vehicles be assembled in the United States with union labor. Recently, a group of ambassadors from the European Union, Germany, and Japan wrote to Congress protesting that the credit would violate international trade agreements since Detroit’s “Big Three” automakers—Ford, General Motors, and Chyrsler-parent Stellantis—would likely benefit the most from the provision.


Hertz is purchasing 100,000 electric vehicles from Tesla and making up to 50,000 available for rent to Uber drivers to promote electric vehicles to the public. Uber and Lyft have pledged to convert their fleets to electric by 2030, though obstacles exist such as the high price of electric vehicles and the paucity of charging stations. The infrastructure bill that Biden signed on November 15 provides $7.5 billion for charging stations, which should improve the latter. Biden’s Build Back Better bill, if passed by Congress, would also help these ridesharing companies to meet their pledges as there are generous tax incentives in the bill for lowering the price of electric vehicles that are both refundable and transferable.

However, it is not clear whether Americans want electric vehicles because of their high cost, limited range and reduced trunk capacity because of their large batteries. Regardless, President Biden wants half the vehicles to be sold in the United States to be electric by 2030 and auto manufacturers are producing more electric models to try to meet that goal.

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