AUTO

Electric Car Rental Market Expected to Grow by $11 Billion by 2027

April 21, 2024

Tourists from countries other than the United States are renting electric vehicles to save money on fuel.
Drivers are also choosing to rent EVs because they are concerned about carbon emissions.
Rental companies like Zipcar offer hourly, weekly, and monthly EV rental plans.
EV renters appreciate scheduling EV rentals online and picking them up with contactless methods.

Hertz may have created a debacle by stepping too quickly into the electric car rental market. Unfortunately, the EV giant may have liquidated its electric cars too soon, as the market size is expected to grow by 2027 thanks to a boost in international tourism.

Despite the massive sell-off, Hertz is still renting EVs. Avis and Enterprise also have EVs in their rental fleets.

Growing EV Rentals Outside the United States

It’s no secret that the United States lags behind the rest of the world regarding electric vehicle adoption. While American drivers needing rental cars might still lean toward gas-powered cars, vacationers in or from Europe, the Middle East, Africa, Asia, and the Pacific Islands prefer to rent an electric car because of the reduced fuel costs and minimal impact on the environment.

According to Technavio, the global electric car rental market isn’t slowing. The data analysis company is estimating that the market will grow by more than $11 billion between 2023-2027. This is good news for the industry, especially for companies like Zipcar, Carzonrent, and the OEMs manufacturing electric vehicles.

Why Drivers Like Renting EVs

Drivers appreciate the ease of online rent-a-car services like Zipcar because they can choose the exact car they want and have a contactless transaction. As more OEMs are developing battery-swapping technology, the process of an electric car rental is becoming easier, as drivers no longer have to wait to charge. Battery swapping locations would be conveniently spaced to remove range anxiety from the equation.

Transportation companies like airlines, airports, and electric vehicle manufacturers are working together to build charging stations at major hubs, which is expected to encourage more EV and PHEV sales and rentals.

Driving the EV Rental Market

More drivers are renting electric vehicles, hybrids, and plug-in hybrids because they align with their beliefs about sustainability and urbanization. The market is having an impact on crude oil consumption — especially in Europe, where the 25% EV adoption has reduced oil consumption by millions of barrels daily.

Advancements in battery technology are encouraging more people to rent EVs. Drivers can rent EVs for short or extended periods. For example, Zipcars allows drivers to rent EVs on hourly, weekly, or monthly plans. In many cases, renting an EV is less expensive than renting a gas-powered car, and vacationers who like to save money might give a rental EV a try.

EV Owners, ICE Owners, and EV Rentals

People who own EVs are expected to want to rent EVs. As an EV owner whose Kia EV6 is in the shop (for weeks or months waiting for a back-ordered part), I am currently renting an electric car — interestingly, another EV6. My local Kia dealership provided the rental EV, and having it makes the wait for the backordered part less annoying.

After chatting with representatives from my Kia dealership, I learned that they prefer to give rental EVs to people who already own EVs. They’ve found that people who aren’t familiar with EVs tend not to enjoy borrowing one for a day or two. Driving an EV is slightly different from driving an ICE car, especially with the battery regeneration technology and charging needs. The learning curve can be too much for people who don’t want to think about charging, regenerative braking, and range anxiety.

The Tesla Learning Curve

I’ve also chatted with friends (who own ICE vehicles) who have rented Teslas while on vacation. Their biggest complaint was how different a Tesla is from a regular car. They didn’t know how to open the doors or use the screen.

They rented an electric car because it was a novelty they wanted to try on vacation, but found that they didn’t enjoy it — mostly because they didn’t know what they were doing with it. They found it annoying that they couldn’t just get in and drive. The car rental market would better serve its customers by offering non-Tesla EVs, as they have “regular” doors, start buttons, and cabin features.

Uber Drivers Who Rent EVs

_{Image care of Viktor Avdeev on Unsplash}

I frequently chat with people who are charging their EVs, and I’ve met many drivers who are renting EVs to use while driving for Uber. They often end up with vehicles like a Chevy Bolt or Kia Niro, and they don’t realize that those models charge slowly — even at Level 3 DC fast-charging station.

They end up missing out on Uber money because they have to sit for so long at charging stations. Again, educating the EV renters about EVs would help them understand how to get the most out of EV rentals — or to rent EVs with faster charging capabilities.