Kiwis' Tesla strategy re-shapes industry

Four years ago, Patrick Broadbent and Jamie Bennett had a car rental fleet comprised of a 20-year-old Nissan Sunny, best hired out to backpackers. Now they are ordering brand new $120,000 Teslas.

It's been a rapid rise to elite electric cars as part of a 500-car fleet for the young founders (31 and 32 years old respectively) of Snap Rentals - a go-ahead New Zealand car rental company seeking to re-write the owner's manual when it comes to the industry.

Electric vehicles are one way they are seeking to do so. Snap Rentals claim to be the first to introduce EVs to the market here and believe they are about to pull off a world first: by next year all of their airport shuttles will also be all-electric.

"It's something we are really passionate about," says Broadbent. "We like the environmental element, the technology and it's just an exciting development. You can see that, while EVs are a small part of the New Zealand scene, things are rapidly changing.

Teslas are high-performance, luxury machines which sell here from about $120,000. The company is trying to re-shape the driving experience for customers and, even though it has yet to turn a profit, losing hundreds of millions of dollars last year alone, Tesla last month became the most valuable American car company, surpassing General Motors.

"Tesla are also working hard in New Zealand putting up infrastructure so drivers have access to a charging network," says Bennett. "Soon, you'll be able to drive from Auckland to Wellington with zero petrol...it will cost you about $20 to make the trip.

"Soon after that, it will be possible to drive an electric car the length of the North Island and the South Island. We think zero-emissions cars are a great fit with New Zealand tourism and our tourism clean and green image."

Broadbent says: "Auckland Council are waiting to hear if changes to legislation and road rules will allow electric vehicles access to bus and car pool lanes. That works so well in Los Angeles - EV drivers are allowed to do that and daily commuters are cutting their commute by an hour or more."

Range has always been the bugbear of early electric cars with buyers often put off by not being able to travel very far before the batteries need a re-charge. However, the Tesla S is not only capable of 0-100km/hr in the blink of an eye, it can run up to 500km before needing a charge.

Snap Rentals already have a Hyundai Ioniq electric car and one Tesla Model S with more to come over the next few months; they have ordered three Model 3s - the mid-range, more affordable Tesla due here next year.

But it's not the only way they are looking to snap the conventional business model for rental cars.

They are one of three SMEs selected by the Bank of New Zealand for its Supersize SME programme. The bank launched the scheme in conjunction with NZME and Newstalk ZB to find SMEs with growth ambitions which can be mentored to reach the next level of business success. Snap Rental's founders pitched their business plans to an expert panel, including Newstalk ZB's Mike Hosking, BNZ's Director of Partners Shelley Ruha and The Icehouse CEO Andrew Hamilton before being selected.

Their success, stemming from that first 20-year-old Nissan Sunny, is also down to a customer service experience they think will serve them well in other markets.

Based in Auckland and Christchurch now, Broadbent and Bennett are looking to re-open in Queenstown (an early foray there was not successful) - and have their eye on the Australian market.

"When we started out with the Sunny, we appealed to the backpacker end of the market. Then we started discovering people other than backpackers were coming to us," says Bennett.

So they then began buying nearly new cars, imported from Japan - and set in place an attractive price regime. That, plus a clever customer service strategy, worked.

"We knew that when you go to the big brand car rentals, you get nice cars - but you pay through the nose for them," says Broadbent. "So we hire out new cars at old car prices and we also make a difference with the customer experience."

Signing up for car rentals, insurances and so on can be lengthy and tedious. Snap Rentals make it snappy - speed is an important part of their service, as Bennett says: "We know people are not there to rent a car; they are there to drive a car. We make that happen.

"If you go to the big airports overseas, like Heathrow and Los Angeles, the rentals are all off site. People have to arrive, get their bags, find the shuttle, do the paperwork - they have to allocate a huge amount of time to picking up a car. We cut that right down."

Broadbent says: "Anyone who has hired a car will know of frustrations like not being able to find it in the car park. We take care of that with the simple act of walking to the car with the customer. You'd be surprised the difference it makes."

They have studied the Australian market and believe there is room for them even in such a well-established field: "We think there are a lot of inefficiencies there and I think we can do it a lot better than they can. With New Zealand's tourism experience now, there are quite a few things the Australians can learn from us."


Follow the journey on The Mike Hosking Breakfast on Newstalk ZB and at SupersizeSME.co.nz