Electric Car Rental Market Size

Electric Car Rental Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The electric car rental market is expected to grow at a rapid pace, with the market size estimated to reach $11.4 billion by 2023 and to reach $34.8 billion by 2032. Its compound annual growth rate will be 13.0% from 2024 to 2032, indicating a strong upward trend in demand for electric car rentals. The growth trend is being driven by increasing public awareness of the environment and by government support for the electric vehicle market. Advances in battery technology and the charging network are making electric cars more convenient and accessible, driving the market. The major players in the electric car rental industry, such as Hertz, Enterprise Holdings, and Sixt, are expanding their electric vehicle fleets and improving customer service. Strategic initiatives, such as forming alliances with electric vehicle manufacturers and investing in charging stations, are necessary to meet the increasing demand for sustainable transportation. Electric car rental will continue to grow, supported by technological developments and a growing commitment to reducing carbon emissions.

Regional Market Size

Regional Deep Dive

The Electric Car Rental Market is expected to witness significant growth in the coming years, owing to the increasing inclination towards electric cars, advancements in EV technology, and government initiatives. In North America, the market is characterized by the presence of established rental companies integrating electric vehicles into their fleets, while Europe is characterized by the presence of government regulations promoting sustainable transportation. The Asia-Pacific region is characterized by rapid urbanization and government support. The Middle East and Africa are slowly but steadily adopting electric mobility, owing to economic diversification. Latin America is also expected to witness growth in the coming years, owing to the growing inclination towards sustainable transportation.

North America

• Hertz and Enterprise have recently expanded their EV offerings. Hertz, for example, has committed to purchasing 100,000 Teslas to bolster its fleet.
• A combination of strict emissions regulations and financial incentives for EV adoption has influenced rental car companies to make the switch to electric cars.
• In the meantime, new innovations in charging, such as the partnership between the rental companies and the ChargePoint network, have made renting electric vehicles even more convenient.

Europe

• The European Green Deal aims to make Europe climate-neutral by 2050. It is this that has prompted the rental companies to invest heavily in electric cars.
• The companies Sixt and Europcar are already launching into the electric mobility market with initiatives to provide their customers with fully electric vehicles in major European cities.
• Governmental support, such as grants to purchasers of electric vehicles and tax breaks for car rental firms, accelerates the changeover to electric mobility.

Asia-Pacific

• In recent years, China has become the world's largest electric vehicle market. To meet the increasing demand for electric vehicles, Didi and other ride-hailing companies have launched electric vehicle sharing services.
• The Japanese “green mobility” program is a good example. It is promoting the use of electric vehicles and helping rental companies to expand their fleets of electric vehicles.
• India is the second country in the world after China in which the population is the most rapidly increasing. With this comes a need for sustainable transport, and the rental companies are beginning to explore the possibility of electric vehicles.

MEA

• The United Arab Emirates is making great strides in the field of electric cars. The Dubai Electric Vehicle Plan, for example, aims at making 10 percent of the cars in the emirate electric by 2030.
• Careem is working on a rental service for electric cars as part of its commitment to the environment and reducing carbon emissions in the region.
• However, the market for electric mobility is still nascent.

Latin America

• In the meantime, the earliest countries to adopt electric vehicles are Brazil and Chile.
• There are already some local companies such as Movii, which rents electric cars in cities in order to promote sustainable mobility.
• Among consumers in the region, awareness of climate change and the need for sustainable tourism is a growing interest in the rental of electric vehicles.

Did You Know?

“In 2022, the electric car rental business accounted for about 5% of the total rental car market in North America, and it was expected to increase as more and more consumers were interested in sustainable travel.” — Statista, 2023

Segmental Market Size

The market for rental electric vehicles is growing strongly, as consumers are increasingly choosing sustainable modes of transportation. This market plays a crucial role in the mobility system, especially in urban areas where the need for convenience and the environment is high. The main factors behind this growth are the growing awareness of climate change, the support of regulatory policies for the introduction of electric vehicles, and the development of batteries that increase the performance and reduce the cost of electric vehicles.

In the meantime, the market is already in a stage of a limited deployment, with companies such as Zipcar and Enterprise integrating electric cars into their fleets. Notable regions such as California and Europe are at the forefront of this deployment, driven by government incentives and the development of charging infrastructure. The most important applications are short-term rentals for city commuting and long-term rentals for eco-conscious travelers. These applications are being driven by trends such as sustainable initiatives and government regulations to reduce emissions, while smart charging and fleet management are shaping the evolution of this market.

Future Outlook

The electric car rental market is projected to grow at a strong CAGR of 13.0% from 2023 to 2032, from $11.39 billion to $34.83 billion. This growth is driven by a growing demand for sustainable transport, rising urbanization and the expansion of the EV charging network. In 2032, it is estimated that the electric vehicle rental fleet will account for about one-quarter of the total rental fleet in major cities. This is mainly due to the high demand for consumers and the incentive to reduce carbon emissions.

In the future, technological developments such as improvements in battery technology and charging stations will have a crucial role to play in shaping the market. Also, the development of battery-swapping technology will make it easier to rent an electric car, and this will make it more attractive to consumers. Government policies, such as tax incentives and subsidies for EV rental, will also boost the market. Also, the integration of smart technology and mobility-as-a-service (MaaS) platforms will change the way consumers rent and use EVs and increase the efficiency of the rental industry.