Electric vehicles (EVs) are causing a major shakeup in the vehicle rental industry, with some companies facing the possibility of closure due to the challenges associated with renting out electric cars. Kendall Cars, a prominent family-owned rental group in the UK, has raised concerns about the impact of EVs on independent rental companies, citing high insurance costs as a significant barrier to sustainability.
Mark Kendall, the group’s managing director, highlighted the financial strain that EVs impose on smaller rental companies that self-insure their vehicles to keep rates competitive. He explained that the perceived risk associated with electric cars has led many rental firms to reconsider their business models, with some opting to cater exclusively to business customers who can include the vehicles in their company insurance policies.
Despite efforts by national rental firms to pivot towards serving business clients, Kendall Cars and similar companies are finding it challenging to adapt to the changing landscape. The installation costs of charging infrastructure, coupled with limited demand for EV rentals, further compound the difficulties faced by independent rental companies.
The reluctance towards EVs among rental firms has broader implications for car manufacturers, who rely on the rental sector as a buffer during market downturns. While there is some demand for electric vehicles, it remains relatively low compared to traditional petrol and diesel cars. Adam Forshaw of the British Vehicle Rental and Leasing Association (BVRLA) highlighted the financial burden of installing chargers as a key obstacle for rental companies, exacerbated by the lack of incentives for customers to choose EVs over conventional vehicles.
Kendall Cars, for instance, has recently invested in costly charging points at one of its branches to accommodate EV rentals. However, the logistical challenges of ensuring that vehicles are adequately charged upon return have led to additional expenses for the company. To incentivize customers to recharge EVs before returning them, Kendall Cars has implemented a surcharge for vehicles with low battery levels.
The evolving dynamics within the vehicle rental industry underscore the need for innovative solutions to navigate the transition towards electric mobility. As rental companies grapple with the implications of a shifting market landscape, collaboration between stakeholders and policymakers will be crucial in driving the adoption of EVs and overcoming the associated challenges.
