According to Reuters, the 100-billion-dollar Western car rental industry is now gradually launching electric vehicles, while Chinese-made cars are poised to play a leading role.
According to a European executive, cars that have long been dominated by well-known U.S. and European brands will increasingly turn to Asian automakers during the transition to electric vehicles.
"Historically, automakers in Europe and the United States have had an advantage, but the shift to electric vehicles is being shuffled," said Olivier Baldassari, chief operating officer of leasing giant Europcar.
Citing Great Wall Motor's Euler series as an example, he said that electric vehicles produced by Chinese and Asian manufacturers are comparable in quality to Western models, but the price is generally lower.
Even small savings make a lot of sense in the huge car rental industry, which buys millions of new cars each year, accounting for one-tenth of all new cars in the U.S. alone. Companies in the sector have long refused to rush to electrify because of weak customer demand for electric vehicles and their concerns about endurance.
However, several analysts say now is the best time to start, as companies have enriched their coffers with lucrative profits during a pandemic that has overcrowded public transportation and airports. In the United States, car rental companies received a record $1,320 per vehicle in 2021, according to the American Car Rental Association. By comparison, the pre-pandemic price was about $1,000.
Last October, Hertz spearheaded the announcement of plans to buy 100,000 cars from U.S. auto pioneer Tesla, adding to pressure from competitors to announce transformation plans. At the same time, Europcar has pledged to increase the proportion of its electric or low-emission hybrid vehicles from the current 3% to 20% by 2024. This means that if the company increases its fleet inventory to 350,000 units before the pandemic, it will need to buy up to 70,000 clean energy vehicles over the next two years.
Baldassari said Europcar is increasingly sourcing electric vehicles from Great Wall Motors, SAIC and Geely's Polestar. Although it also buys cars from traditional partners such as Renault and Stellantis.
Industry players run at different speeds, each making their own calculations based on their own market. In the U.S., many consumers prefer fuel-fueled SUVs and pickup models, and public charging facilities lag behind much of Asia and Europe. Chris Haffenreffer, vice president of Enterprise, said electrifying just a quarter of Enterprise's fleet at Orlando airport would require the equivalent of the daily electricity needed by more than 1,000 homes. Orlando Airport is Enterprise's largest consumer rental location.
The group currently owns thousands of electric vehicles in North America, including Tesla, Nissan, Hyundai, Kia and Polestar. While the company says it has talks to all automakers around the world, it has no plans to increase its market share at this time.
The pace of change and the timeline for large-scale fleet overhauls mean that gasoline-powered vehicles are expected to remain a major buyer for years to come. According to the overall transformation plans of global automakers, electric vehicles will account for at least 40% of their sales by 2040.
Ultimately, though, this shift could have far-reaching implications for the fortunes of Chinese automakers in Europe. Europe is a crowded, highly competitive car market dominated by well-known brands that have had a hard time breaking into in the past.
For years, they have struggled with the idea that China, which is associated with cheap mass production, cannot compete in quality. However, such a view is challenged in a new reality: Top Western automakers such as BMW and Tesla now produce cars in China. China is a technology powerhouse and the world's largest automotive market.
Great Wall Motors, one of Europcar's suppliers, is expected to launch the Euler Cat compact electric vehicle in Europe this year, priced at about 20,000 euros and with a range of about 250 miles (400 kilometers), joining the ranks of more and more Chinese electric vehicle manufacturers in their European layouts.
OC&C Strategy's Mountfield said Chinese manufacturers, which use leasing channels to build brand awareness and increase sales, will follow the example of Kia Motors and Hyundai when they gained a foothold in Western markets in the 1990s.
(Proofreading/Sharon)