Higher costs than combustion engines
Car rental companies are increasingly avoiding electric cars
April 8, 2024, 8:23 a.m
The reluctance to purchase electric cars is evident not only among private buyers, but also among car sharers and car rental companies. They are reducing the proportion of battery-operated vehicles and are skeptical about new purchases. Combustion engines still have advantages.
Due to difficult market conditions for electric vehicles (BEVs), some rental car and car sharing providers are also reducing the electric share of their fleets. At the Berlin car sharer Miles, for example, at the end of last year only just under 17 percent of all rental cars had an electric drive, as the company announced upon request. Just six months earlier, the proportion was 25 percent. New electric cars are currently only being integrated into the fleet to a limited extent, it said.
“A direct comparison between combustion vehicles and electric cars in car sharing shows that an electric car still has a cost disadvantage compared to combustion engines,” explains Miles. “Due to the higher acquisition costs, the more complex and expensive repairs and the higher operational effort.”
Due to their shorter range, electric cars would have to be charged more frequently than combustion engines. Customers would also be more likely to rent a car with a conventional drive if the battery level is low, especially if longer journeys or excursions are planned. “E-cars will remain an integral part of our fleet, but the switch will not take place quite as quickly as originally planned,” Miles continued.
Sixt does not want to ban electric cars completely
The rental car and car sharing provider Sixt from Munich made a similar statement. The company also did not want to completely ban electric cars from the fleet, it announced a few weeks ago when presenting the annual balance sheet for 2023. “However, the specific design of further development requires a high degree of flexibility.” Accordingly, the market conditions for the sale of used e-vehicles have deteriorated significantly. “In Germany, for example, prices for such vehicles fell by more than 20 percent over the past year.”
According to Sixt, it has therefore started removing electric cars from its fleet for which there are no buyback or leasing agreements. At the end of February 2024, the proportion of such vehicles in Sixt’s electric fleet was only around half as large as it was on March 31, 2023, it was said.
According to the company, the share of electric cars in the entire fleet at car rental company Europcar is around twelve percent internationally and higher in Germany. “We are within the scope of our goals and currently see no reason to reduce them,” said a spokeswoman.
Hardly any new registrations at the beginning of the year
Recently, landlords and car sharers have hardly bought any new electric vehicles. In the first two months of the year, the Federal Motor Transport Authority only counted 663 new registrations for this group of owners – that corresponds to a share of 1.7 percent of their purchases. On average for 2023, BEVs accounted for 12.4 percent of new registrations among rental companies and car sharers. In total there were 37,052 pieces. Even in the same period of January and February 2023 last year, when demand for BEVs temporarily collapsed due to a reduced premium, the electric vehicles were still significantly more popular with these providers with almost 1,800 new registrations or 4.4 percent.
The purchase bonus for commercially used electric cars expired completely in September. Demand then fell significantly. In December, the government surprisingly canceled the purchase premium for private customers. Since then, electric drives, which had enjoyed high growth rates for years, have lost significant momentum. According to the Association of the Automotive Industry (VDA), the number of newly registered electric cars fell by 14 percent in the entire first quarter of this year compared to the same period last year.
From the point of view of the Miles company, one key to boosting demand again, at least in the commercial sector, lies with the municipalities. A helpful approach would be to exempt parking fees for electric vehicles in cities. “With a view to the future, it is just as important that vehicle ranges continue to increase and the charging infrastructure in cities grows,” emphasized the company.