VeraSun Energy
On its face, the deal is pretty modest. For starters, although Enterprise has the world's largest fleet of flexible-fuel vehicles at 41,000, that number still represents just 4% of its total fleet. Secondly, VE85 is currently available in only 90 retail locations nationwide, compared with the almost 170,000 traditional gas stations that litter the countryside.
Nevertheless, I like the deal from both companies' perspectives. It gives VeraSun some good advertising and helps to expand the reach of ethanol. For Enterprise, it gives the company a boost in the eyes of environmentally conscious consumers in its battle against Hertz
Longer-term, the deal could also give the broader ethanol industry a boost. In many ways, I liken the deal to efforts by utility companies such as Xcel Energy
On a smaller scale, this deal could have the same effect for ethanol, especially if Hertz, Avis, and other car rental firms also follow suit and begin converting more of their fleets.
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Fool contributor Jack Uldrich does not own stock in any of the companies mentioned in this article. The Fool has a strict disclosure policy.