Electric Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Electric Car Rental Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Electric Car Rental Market was valued at USD 9.13 billion in 2021, and it is expected to reach USD 20.42 billion by 2027, registering a CAGR of 14.36% over the forecast period.

With the outbreak of COVID-19, many new habits emerged, including social isolation, cleanliness, sanitation, and working from home. Many routine tasks, such as taking public transportation to work, were unsafe due to the risk of coronavirus. Additionally, it has had also an impact on the global electric car rental business. The number of people traveling has decreased significantly as a result of the outbreak. People have been staying indoors due to strict lockdown requirements and to avoid becoming ill. As a result, demand for electric car rental services has decreased. However, a few leading rental companies such as Hertz, Enterprise Holdings, and Avis Budget Group have declared plans to phase out internal combustion engines with electric cars.

Over the long term, there is a huge increase in the number of individuals traveling for business and pleasure around the world is driving the demand for zero-emission electric car rental services, fueling the industry's growth. Factors such as increased demand for fuel-efficient, high-performance, and low-emission rental vehicles, stringent government rules and regulations on vehicle emissions, as well as lower battery costs, and rising gasoline prices, all contribute to the rise of the electric car rental market. Rising internet penetration in both emerging and developed countries has enabled enterprises in the sector to attract a wider consumer base through the use of dedicated mobile apps for customer convenience. Technology is regarded as a critical component driving market expansion. The effect of technical breakthroughs has recently transformed the sector. Improved customer and company information management, as well as simple internet booking apps, are two important ways that vehicle rental service companies can provide better services to their clients.

However, the market faces challenges from restraining factors like the lack of charging infrastructure in emerging countries which may hamper the market growth.

Asia-Pacific region is expected to be the fastest-growing market owing to the presence of OEMs and changing consumer preference toward electric rental cars. Additionally, a few OEMs are using different strategies such as partnerships with car rental companies, which will positively impact the market growth during the forecast period. For instance,

Key Highlights

• In July 2022, XPeng Motors formed a strategic alliance with local car rental company eHi Car Services to supply vehicles to the latter. Over the next three years, XPeng and eHi will continue to improve their cooperation in vehicle procurement and operation, as well as in the building of the supercharging system, vehicle operation, and user service experience. This is the first time a new Chinese automaker has teamed with a travel rental company that will only operate electric vehicles in large numbers.

Key Market TrendsOnline Booking Type Is Expected To Have High Market Share

Electric Car Booking is offered through a cab company's mobile app or website. In addition, the availability of an online payment option has streamlined the process. The affordability and ease of access to services are the major drivers of this ecosystem. Customers' needs for convenience and cost-effectiveness are driving the demand for electric car rentals. Online booking has various advantages as well as numerous transparency challenges that organizations are continually examining and correcting. The day-to-day activities of electric car rental companies are managed via a uniform system. Compliance policies, rules, regulations, and terms and conditions, which differ from firm to company, are followed.

• In November 2021, a beta group is testing Joulez's Tesla rentals as the business works to complete its booking smartphone app. Joulez is building not just an EV rental fleet, but a full support system to help clients realize the power of driving an EV. The company is now working on designing and developing the smartphone app, and it has a beta test group of clients renting Teslas. Joulez will rent apartments in New York City at competitive rates ranging from $75 to $200 per day. Bergdale also mentioned plans to collaborate with EV manufacturers, airport authorities, airlines, EV charging firms, cities, and anybody else interested in accelerating the transition to an EV future.
• In October 2021, Carzonrent, a car rental company, established an electric vehicle (EV) platform to provide its clients with clean and sustainable mobility alternatives. The company intends to offer a fleet of EVs under the banner of Plug Mobility in order to develop a uniform EV ecosystem in order to reduce its carbon footprint. Plug Mobility plans to introduce 20,000 electric vehicles (EVs) across India to serve corporate, hotel, airline, government, PSU, and SME clients, with the goal of saving 389 million tonnes of CO2 emissions over the next five years.

North America Is Expected To Witness A Considerable Share In Target Market

During the projection period, North America is expected to witness considerable growth. This is attributed to the existence of several of the region's largest vehicle rental companies, such as Avis Budget Group and Enterprise Rent-a-Car, which are expected to present attractive growth potential. The growing number of business and leisure visits across the region is also a key driver of regional growth. Furthermore, the region contains a variety of prominent tourist locations that attract a big number of people who demand vehicle rental services, hence driving the market growth.

Additionally, Soon after Hertz Global Holdings emerged from bankruptcy in 2021 summer, reformed after the COVID-19 outbreak paralyzed the global automobile rental sector, the Estero, Florida-based company boldly announced a $4.2 billion plan to buy 100,000 Tesla fully electric cars (EVs) by the end of 2022. Suddenly, the industry was racing to switch from internal combustion engine (ICE) models to EVs. While Hertz was the first to launch, its two main competitors, Enterprise Holdings and Avis Budget Group have subsequently followed suit. But, just as full-scale EV adoption among American drivers would take years, the rental car shift will be a marathon, not a sprint.

Competitive Landscape

Collaborations, acquisitions, and partnerships are taking place in the automobile industry all over the world. To meet rising consumer demand for electric car rental services Such as geographical expansion, a few OEMs are establishing strategic alliances with car rental firms, and car rental companies are also purchasing electric cars in order to shift away from internal combustion engines. For instance,

• In October 2021, Carzonrent introduced Plug Transportation, an electric vehicle (EV) Mobility-as-a-Service (MaaS) platform, to provide businesses with sustainable mobility options. According to the startup, it would offer a chauffeur-driven EV fleet for various ground mobility needs such as business travel, airport taxi, SME services, limo and dedicated fleet, employee transfers, crew transfers, and government and PSU official travel.
• In August 2021, Avis Budget Group has launched new rental websites for its Avis and Budget brands. The refreshed websites will connect prospective clients to a growing network of independently operated Avis and Budget licensees located in over 90 emerging global markets.​

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