LOTUS CAR RENTAL/ALTERANTIVE FUEL VEHICLES
Stephen McCauley
Comm/215
University of Phoenix
June 7, 2013

INTRODUCTION
Lotus car rental, one of the world’s leading car rental companies, is in a position to take advantage of a great opportunity. This is an opportunity to be one of the first car rental services to provide our consumers with alternative options to fuel-powered vehicles, and to rise above the competition. Adding alternative fuel vehicles to our car rental fleet will increase our car rental turnover and improve the company's image to consumers. Creating a fleet of Alternative fuel vehicles for Lotus rental cars would be a very wise decision. There is a strong movement towards using alternative fuels for many reasons. The consumers are now motivated to drive vehicles that not only protect the environment, but also save money. More and more car manufactures are providing vehicles that use alternative fuels or flex fuels. This movement in the market place is gaining momentum. It would be wise for Lotus to lead this market by providing this service to the consumer. Today environmentally concerned consumers are looking for ways to not only save the environment, but also save money. Oil prices are constantly on the rise and turmoil in the oil producing regions has not helped alleviate the problem. Taking these considerations and research into account, we feel that Louts Rental Cars should invest in an alternative fuel vehicle fleet.
BACKGROUND ON ALTERNATIVE FUELS
Alternative fuels are derived from resources other than petroleum. Some Alternative fuels are produced domestically, reducing our dependence on imported oil, and some are derived from renewable sources. Often, they produce less pollution than gasoline or diesel. Currently there are a wide variety of alternative fuel vehicles on the market. These alternative fuel vehicles use a variety of different alternative fuels. The more common types of fuels used are ethanol, biodiesel and natural gas. These fuels have been around for many years, but their widespread use has only been in the last decade. Ethanol fuel is from corn, grasses, and other crops. Biodiesel is a form of diesel fuel that is produced from vegetable oils. This type of fuel not only produces fewer pollutants than normal diesel fuel, but also be reused and filtered. Natural gas is used in two forms to fuel vehicles: compressed (CNG) or liquefied (LNG). CNG is the type used for passenger vehicles, which can run on CNG alone, or have a bi-fueling system that uses both CNG and gasoline.
ADVANTAGES OF ALTERANTIVE FUEL VEHICLES
While there are various alternative fuels, access to alternative fuels should be a consideration. These vehicles are becoming very popular with consumers because of the lower cost and better mileage, creating market pressure to build more alternative fuel stations. The environmental conscious public is looking for a more green ways to travel, and, fortunately, there are many different types of alternative fuel vehicles available on the market today. Cleaner vehicles using battery electric, hybrid electrical and alternative fuels are often supported by government incentives to encourage adoption of new technologies that are beneficial to society (Khilawala, 2012). Many of the leading car manufactures are offering models that can be ordered to use alternative fuels. In fact, most car manufacturers offer vehicles that can be converted to an alternative fuel system. While there may be cost increase involved in these upgrades, the long term cost of fueling these vehicles and Government incentives help to bring the ownership cost down. Furthermore, there is a very powerful shift of social values in today’s society. Many cultures around the world are working to save and preserve the environment. The idea of saving the environment is not only good ethics, but it could be very good business. Since 1998, patrons of EV Rental Cars have saved around fifty thousand dollars via renting alternative fuel vehicles from the corporation, and EV rentals has saved around fifty thousand gallons of gasoline through the use of alternative fuel vehicles. Very good business is perhaps an understatement. Alternative fuel vehicles come in all makes and models; therefore there is something there for every type of driver. From the young lady that wants to drive a nice sedan to the guy that likes the big SUV, there are alternative vehicles to fit every lifestyle out there. Hybrids are the most popular brand now, they provide excellent fuel economy, run on existing gasoline supplies and drive just like regular cars, they don’t require you to anything different then you would normally do when driving. Not only can you get the car of your choice you will also be an impact on helping make the environment safer. The impact that cars have on our environment is an important issue especially in the world today, where we face problems like global warming and oil spills (Newman, 2010). People are looking for a way to get ahead of these problems and try to cut them off before they start in some cases. Alternative fuels play a big part in this since they decrease the release of negative pollutants in the air and into the water. One more good reason to make the switch is that the government, which also wants to cut down the pollution that is being releases by vehicles, is offering tax incentives for purchasing alternative fuel vehicles. This could offer a significant tax break for Lotus Car Rental, so not only would we be helping out the environment but we would also be helping ourselves.
DISADVANTAGES OF ALTERANTIVE FUEL VEHICLES Consumers are attracted to alternative vehicles for a number of different reasons but compromises must be made when you decide that you want a vehicle with an alternative fuel source. The chief disadvantage for most consumers is the higher price that comes with these types of vehicles. As a rental car company we will have to take into account the pricing of these vehicles and the maintenance fees that go along with them. Since these types of vehicles are new on the market there is also a low concern about the reliability of these new high tech automobiles. For Lotus there are a few key areas would need to address when trying to add alternative fuel cars to our fleet. Lotus has to think about the same things that the regular consumer out to buy a new vehicle has to think about. Several factors come into play when considering alternative fuel vehicles into play, when it comes to alternative fuels we have to be aware of the different types of maintenance that will be required. Specialized repair shops and technicians with experience in these areas will be needed for any malfunctions the vehicles will have over the course of their time in our possession (Wittrock, 2011). The availability of alternative fuels is another huge con to offset the pros. Many places now carry E85 fuel (85 percent ethanol, 15 percent gasoline), but it may be difficult to find other alternative fuel types. Even the stations that do carry E85 aren’t as plentiful as many people would hope and they often find themselves driving out of their way just to “gas” up their cars. For our customers this could be discouraging as some alternative vehicles cannot be “refueled” at your local corner gas station. In the coming years the world will catch up with the growing consumer market for alternative fuel vehicles.
THE ECONOMICS OF ALTERNATIVE FUEL VEHICLES Lotus Car rental is a business and with that being said in order for us to stay a business we need to make smart decisions with how we invest in ourselves. One of the advantages as a company that we can use when equipping our fleet with alternative fuel vehicles in that in recent years the government has been giving incentives for green vehicles, in early years these incentives were open to anyone who bought an alternative fueled vehicle besides biodiesel. In recent years they have narrowed to requirements to a certain selection of vehicles. Since 2006, the federal government has offered a $2,000 tax deduction, but for ethanol, natural gas, hydrogen, and petroleum fueled vehicles the incentive was increased to a $4,000 tax credit (Morgan, 2013). Some states even offer access to HOV lanes and special parking if you are driving a vehicle that uses alternative fuel. This will just give our customers another reason to want to try out our new line of vehicles. The customer will be saving by having to fill the car less frequently then they would with a normal fueled vehicle.
WHY LOTUS SHOULD USE ALTERNATIVE FUEL VEHICLES (CONCLUSION) Lotus has to listen to the demand of the public. The public is asking for vehicles of a high quality that are also environmentally friendly. The initial cost of adding alt fuel vehicles will be great but in the long run we will not only save money but also give our customer a safe reliable vehicle to get them from point A to point B. The ability to give a wide selection of reliable cars that also do their part to help keep the earth clean will go a long way with helping keep the image of Lotus Car Rental in line with what we stand for.

References
Khilawala, R. (2012, March 10th). Alternative Fuels Pros and Cons. Retrieved from www.buzzle.com: http://www.buzzle.com/articles/alternative-fuels-pros-and-cons.html
Morgan, A. (2013, Jun 1). Federal Tax Credits for Alternative Vehicles. Retrieved from www.fueleconomy.gov: http://www.fueleconomy.gov/feg/tax_afv.shtml
Newman, R. (2010, Jan 11th). The Pros and Cons of 8 Green Fuels. Retrieved from www.usnews.com: http://money.usnews.com/money/personal-finance/articles/2008/01/11/the-pros-and-cons-of-8-green-fuels
Wittrock, M. (2011, Feb 3rd). Pros and cons: A reality check on alternative fuels. Retrieved from www.consumerreports.com: http://www.consumerreports.org/cro/2011/05/pros-and-cons-a-reality-check-on-alternative-fuels/index.htm