Electric Car Rental Market Analysis Europe, North America, APAC, South America, Middle East and Africa - US, China, Germany, Italy, France - Size and Forecast 2023-2027

Electric Car Rental Market Forecast 2023-2027

The electric car rental market size is estimated to grow by USD 11.24 billion at a CAGR of 12.64% between 2022 and 2027.  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 global electric car rental market.

What will be the size of the Market During the Forecast Period?

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The market offers flexible options for customers, whether they need a vehicle for a short period like an hour, or an extended period spanning weeks or months. Rental services operate on an hourly basis, weekly basis, and monthly basis, catering to diverse travel needs. With a focus on environmental awareness and sustainable transportation, rental companies provide battery cars, hybrid cars, and plug-in electric cars that boast zero tailpipe emissions. Initiatives like eco-tourism and green certification for rentals encourage the adoption of environment-friendly transport mediums, aligning with global efforts to reduce carbon emissions. Partnerships with ride-hailing services and innovative pricing models enhance mobility-as-a-service (maas) ensuring convenient and eco-conscious travel options amidst rising congestion concerns and fuel prices. Additionally, contactless rental services, predictive maintenance, and autonomous features further improve the rental experience for customers in the travel and leisure economic sector.

Market Dynamics

In the Electric Car Rental 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. 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.

Key Market Driver

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.

Major Market Trends

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.

Significant Market Challenge

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. 

Customer Landscape

The market research and growth 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 market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Electric Car Rental Market Companies?

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 market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:

• Avis Budget Group Inc
• Blu Smart Mobility Pvt. Ltd.
• Blue Cars 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

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.

Market Segmentation

The world shifts towards sustainable transportation solutions, the electric car rental 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 electric car rentals while navigating compliance policies and regulations in the automotive industry.

By Type

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 8.04 billion in 2017 and continued to grow until 2021. 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 electric car rental services for longer.

Regional  Analysis

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Europe is estimated to contribute 42% 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. Electric car rental was one of the companies that supported the government's sustainable development initiative.

Market Analyst Overview

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 for electric car rentals 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.

Segment Overview

The market forecasting report covers market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Type Outlook
  • Economy cars
  • Luxury cars

• Distribution Channel Outlook
  • Offline
  • Online

• Region Outlook
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • North America
    • The U.S.
    • Canada
  • APAC
    • China
    • India
  • South America
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Electric Car Rental Market Scope
Market Report Coverage	Details
Page number	157
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 12.64%
Market growth 2023-2027	USD 11.24 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	12.03
Regional analysis	Europe, North America, APAC, South America, and Middle East and Africa
Performing market contribution	Europe at 42%
Key countries	US, China, Germany, Italy, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
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.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
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.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about Companies
• Comprehensive analysis of factors that will challenge the growth of market Companies

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