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The electric car rental market size is forecast to increase by USD 18.01 billion at a CAGR of 16.68% between 2023 and 2028. Electric vehicles utilize an electric motor for propulsion, featuring fewer moving parts compared to internal combustion engines, resulting in lower maintenance costs and increased efficiency. The compact size of the motor reduces vehicle weight and allows for additional features. This simplicity enhances efficiency and provides instant torque, while regenerative braking extends the vehicle's range. Air pollution, a significant concern, leads to various health issues globally, prompting governments to introduce emission regulations and incentives for electric vehicle adoption, crucial for the growth of the market.
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In the market, services cater to various needs, whether for a short period like an hour or a weekly basis for longer trips. With the rising popularity of battery cars, hybrid cars, and plug-in electric cars, rental companies offer a diverse vehicle categories to meet different preferences. These cars feature battery packs and electric motors, ensuring zero tailpipe emissions and aligning with environmental awareness and corporate sustainability initiatives. As cities embrace urbanization, concerns over congestion drive demand for sustainable transportation options, further fueling the expansion of electric vehicle models in rental fleets. Customers can book both online and offline, making leisure/tourism travel more eco-friendly and convenient. The travel rental company offers rental services on an hourly basis for travel trips through booking engines, providing electric car booking options via the cab company's mobile app with online payment option for affordability, albeit facing transparency challenges. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing government regulations, incentives, and subsidies provided for EVs are notably driving the market growth. Increasing government standards, regulations, and standards in the automotive industry align with the global focus on environmental sustainability. Global economies are constantly striving to reduce their carbon footprint worldwide.
As the automotive industry has contributed significantly to carbon dioxide emissions, automotive industry governing bodies and bodies have taken significant measures to combat this. Government regulators and councils are promoting the use of alternative energy vehicles, such as electric cars and ECVs, to reduce carbon emissions. Therefore, it acts as a marketing enabler.
The introduction of battery-swapping technology is the key trend impeding market growth. Range anxiety is a major problem that hinders the growth of electric cars. Battery manufacturers, suppliers, and OEMs are working on battery-swapping technology that allows batteries to be hot-swapped. Hot-swappable batteries allow you to change batteries in minutes, which solves the problem of remote alarms.
Changing the batteries allows you to travel 80 miles in 5 minutes, which is very useful for consumers. Replacement costs vary between batteries. It ranges from USD 80 to USD 100. Companies plan to offer replaceable batteries for charging stations for an additional fee. The technology is currently being tested, but faster availability could help boost electric cars.
The global power crisis hindering the growth of the EV market is the major challenge impeding the market growth. Due to the growth of the hybrid and electric vehicle market, the demand for power to drive vehicles is also increasing worldwide. Developing countries and underdeveloped countries, where electricity production only covers the average daily consumption, cannot afford a greater number of electric cars. For example, in Europe, 25% of vehicles are electric cars, which reduces the consumption of about 13 million barrels of oil per day. However, it consumes about 11 percent of the global electricity demand. Asia has a huge power crisis in countries like India and Japan. In 2021, Japan accounted for more than 50 percent of the global hybrid car market, exacerbating an already prevailing power crisis.
In addition, the country's dependence on oil imports has increased, leading to higher electricity costs for customers. The growing power crisis in developing countries is a major obstacle to the growth of electric cars and, in turn, to the market.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Current Vehicles Ltd. - The company offers electric car rentals such as Citroen Ami, and Renault Twizy. The company operates as an electric car rental company.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The world shifts towards sustainable transportation solutions, the industry is witnessing significant growth. Offering flexibility in rental durations such as short period, extended period, hourly, weekly, and monthly basis, these services cater to diverse needs. With a focus on reducing carbon emissions and promoting environmental sustainability, zero emissions, electric vehicles (EVs) have become increasingly popular. Rental platforms leverage in-car infotainment systems and online rent-a-car services to enhance the offline booking experience, often integrating features like online payment options and smartphone apps for ease of access. Despite challenges such as rising fuel prices and fuel emissions, initiatives like Plug Mobility and companies like Enterprise Rent-a-Car are driving the adoption of these while navigating compliance policies and regulations in the automotive industry.
The market share growth of the economy cars segment will be significant during the forecast period. Major Companies such as Avis Budget Group, Enterprise Holdings, Europcar Group, Sixt and Hertz included a small set of economical electric cars such as the Nissan Folio, Chevrolet Bolt, Renault Zoe and BMW i3. These cars are aimed at consumers who want to try an electric car for the first time or are more inclined towards green products. It was observed that most of the tourists use electric cars for short trips ie. sightseeing and visiting nearby destinations.
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The economy cars segment was valued at USD 8.82 billion in 2018. It has been observed that customers rent an electric car and trade it in for a more traditional car after an average of two days of use, compared to six to seven days for traditional cars. Even if customers do not use the cars for a long time, curiosity about electric cars attracts them to rent a car for a few days. As driving distance increases and charging infrastructure develops, customers are expected to use these services for longer.
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Europe is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Tourism is the biggest driver of the car rental business. In 2022, the tourism industry had a huge impact on EU GDP, creating many jobs. Europe has always been the most popular destination for tourists, attracting places like the Eiffel Tower, the Colosseum, and the Leaning Tower of Pisa. In order to increase employment and economic growth, the European Commission has launched various initiatives aimed primarily at promoting sustainability, accessibility, and culture, as well as promoting seasonal and coastal tourism. This was one of the companies that supported the government's sustainable development initiative.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market has seen significant growth, spurred by factors such as social isolation concerns, cleanliness, and sanitation amidst the risk of coronavirus. With more people working from home and avoiding public transportation, the demand has surged. Leading rental companies have shifted focus towards zero emission electric car rental services, offering fuel-efficient, high-performance, and low-emission vehicles to meet government regulations on vehicle emissions.
Additionally, the market is witnessing a surge in demand driven by the incorporation of autonomous features, rising fuel prices, and the growing demand for fuel-efficient cars amidst concerns over fuel emissions and CO2 emissions. With a focus on sustainability, consumers are increasingly opting for zero emission electric vehicles (EVs). As electric vehicle manufacturers and travel rental companies embrace compliance policies, rules, and regulations, electric vehicle (EV) platform like Plug Mobility-as-a-service (maas) and smartphone apps are facilitating convenient electric car bookings. Enterprises like Enterprise Rent-a-Car are tapping into this trend, despite challenges like bankruptcy, to offer electric vehicle rental services.
Factors like battery costs, gasoline prices, and internet penetration in emerging countries influence market dynamics. Dedicated mobile apps and online booking and offline booking options have facilitated market expansion, supported by technical breakthroughs in customer information management and internet booking apps. Major trends include collaborations between rental companies, EV manufacturers, airport authorities, airlines, and EV charging firms to expand the EV rental fleet. Companies like Joulez and Carzonrent are leading the charge, offering electric vehicle platforms and all-inclusive support systems to cater to the growing demand for eco-friendly transportation options.
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Market Scope |
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Report Coverage |
Details |
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Page number |
164 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 16.68% |
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Market growth 2024-2028 |
USD 18.01 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
13.19 |
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Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 41% |
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Key countries |
US, China, Germany, Italy, and France |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Avis Budget Group Inc., Blu Smart Mobility Pvt. Ltd., Blue Cars Ltd., Current Vehicles Ltd., DriveElectric, Enterprise Holdings Inc., Envoy Technologies Inc., ETO Motors Pvt. Ltd., Evoke Pty Ltd., Green Motion International, Hertz Global Holdings Inc., Plug N Drive, SIXT SE, Stellantis NV, UFODrive SA, Volkswagen AG, Volt Age Hire, Wattacars, ZERO Carbon Technologies Inc., and Zoomcar India Pvt. Ltd. |
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Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Distribution Channel
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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