Electric Car Rental Market Size

Electric Car Rental Market Analysis

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,

• 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.