The deadline for the sale of petrol and diesel powered vehicles in the UK — 2025 — is quickly approaching. Electric cars are going mainstream, and that means the rental industry is going electric. Let’s take a look at the market as it is now, and as it is expected to change and grow in the near future.
The Current Situation
After decades of ups-and-downs, it is safe to say that the electric car revolution has arrived and is not going away — at least, not unless an even better form of power becomes available. These are our VW Electric Vans
or Citroen Electric Vans
It’s hard to believe, but in 2017, some car rental companies were actually reducing the EVs in their fleets due to lack of demand.
As of summer 2022, electric car rentals are in huge demand, but rental companies in the UK (and the world) are struggling to meet that demand. This goes for all cars, electric and otherwise, and it means the cost of renting a car in general has skyrocketed.
The “rental car apocalypse”, as it’s been referred to by some, affects all types of vehicles — but at least renters of electric vehicles can avoid the equally sky-high prices at the petrol pump. That coupled with a sense of responsibility towards the environment, and it’s no wonder a recent Skyscanner survey reports that 1 in 3 Brits now say they are open to renting an electric car rather than a ‘traditional’, gas-powered car.
And European EV rental start-up UFO Drive reports very encouraging statistics: 80% of their customers have never driven an electric car before, and 97% say they would rent one again.
How We Got Here
Like virtually every industry in the world, car rentals (electric and otherwise) have been affected by the COVID-19 pandemic. With travel and tourism at an all-time low and shut down completely at times, rental agencies were forced to sell off many of their cars. It was really the only move that made financial sense at the time; no one knew how long the pandemic would go on, and the ageing vehicles weren’t making money sitting in lots and warehouses. The British Vehicle Rental and Leasing Association reports that UK fleets were cut by about 30% during this time.
When pandemic-related restrictions eased up and the travel / tourism industry started to recover, so did demand for rental cars. Rental agencies needed to restock their fleets, but they faced significant roadblocks in doing so. Between the semiconductor chip shortage and the war in Ukraine (Ukraine and Russia are key suppliers of both raw materials and parts used in auto manufacturing), cars were, and are, in short supply.
But There’s an Upside to Everything…
As rental companies continue to restock, it’s an ideal time for them to increase their offerings of electric and hybrid vehicles —and it’s an ideal time for customers to try them. Some rental companies are offering discounts and perks as an incentive for customers to rent electric rather than petrol or diesel. An additional incentive? The current petrol prices (also affected by the Russia-Ukraine war), which often shock American visitors in particular. During the summer of 2022 the cost to fill the fuel tank of an average car has at times been over £100. Suddenly renting an EV is looking more and more attractive!
In a 2021 market research report, Technavio predicted that between 2021-2025 the electric car rental market will grow to USD $8.18 trillion worldwide; Europe will represent 43% of this growth. The UK ranks #6 among European countries for most EVs per capita, and Roland Berger puts it in the top 5 for EV sales, growing infrastructure and potential for future growth. All this means the UK will be responsible for a decent chunk of that 43%.
Market trends that are expected to continue to grow over the coming years include:
Electric Car Subscription Services
People are getting their cars the same way they get their entertainment… for one low monthly fee.
Functioning as sort of a halfway point between a short-term rental and a lease, car subscription services offer long-term access to a car without long-term commitments. Renters are typically charged a fee on a monthly basis which includes insurance, tax and maintenance; some packages also include public charging. In an effort to encourage the switch to electric, some rental companies offer discounts and perks for electric car rentals.
It’s hard to beat this model for convenience, and convenience is what young drivers are seeking. It turns out that for the 35-and-under demographic, owning a car is not the status symbol it used to be, and subscription plans suit them just fine. Younger generations also tend to move around a lot, and owning a car can be more of an impediment than an advantage for those who frequently travel internationally.
Companies offering electric vehicles by the subscription model include eVision, Onto, Elmo, Voltric and Electric Zoo. Increasingly they are also being offered by car manufacturers themselves. Volvo, Jaguar and Hyundai have been among the early adopters of the trend.
With a rash of electric vans coming to the market over the next couple of years — including some designed specifically with camping in mind, like Volkswagen’s ID.California — van life is going electric, too. Coupled with the rising demand for campervan rentals, this can only mean one thing going forward: an increase in electric campervan rentals. And when it comes to campervan rentals in the UK and specifically in Wales, look no further than Cowbridge Campers. They have a fleet of Volkswagen Transporter Camper vans for hire.
With the sale of petrol and diesel powered vehicles in the UK to end by 2030, there is only one way for the car rental industry to go — and that’s electric. Rental companies are constantly refreshing their fleets (a typical rental car is considered to have a lifespan of 2-4 years), which means it won’t be long before those fleets are 100% electric.