Car Sharing Going Mainstream: Will Electric Cars Go Along for the Ride?

January 28, 2013 | 12:18 pm
Don Anair
Research and Deputy Director, Clean Transportation

The recent Avis-Zipcar deal got me thinking about the future of car sharing and the possibilities for electric vehicles. The acquisition of Zipcar by Avis, along with car sharing endeavors by other traditional rental car companies like Enterprise and Hertz, indicates that car sharing is an idea that is here to stay and likely to grow. As car sharing becomes an increasingly popular travel choice for more Americans, is it also an opportunity to help accelerate the growth of the electric vehicle market in the U.S.?

Car sharing companies like Zipcar have been adding plug-in electric vehicles to their fleets. Will the trend continue as more traditional rental car companies like Avis, Enterprise, and Hertz get into the car sharing business? (photo: Zipcar introduced a Honda Fit EV to its San Francisco fleet in late 2012.)

Car sharing has exploded in the past decade, with dozens of networks popping up all over the country and major car rental companies getting into the game, as well as automakers themselves. Being able to walk down the street, grab a car for a couple hours, run an errand or two, and not have to search for parking when you get home is an attractive proposition to hundreds of thousands of people it turns out. Other benefits include avoiding the hassle of vehicle maintenance, insurance, and many of the other responsibilities of car ownership – including the significant upfront investment of buying a new car.

Why car sharing and electric cars are a good fit

For a host of reasons, plug-in electric vehicles (EVs) seem like a good fit for car sharing fleets.

  • The range limitations of EVs are less of an issue since the primary use of car sharing vehicles is short trips based on hourly rentals. The reservation process may need to be modified to include some time for recharging when a vehicle is returned, but that doesn’t seem like an insurmountable issue for such tech-savvy companies. And with plug-in hybrids, it wouldn’t be quite as critical to get a full charge between rentals.
  • Car sharing fleets could reap large fuel-cost savings with electric vehicles. Services like Zipcar typically include fuel costs as part of the hourly rental. Our State of Charge analysis showed that an individual owner of an EV could save on the order of $1,000 in fuel costs per year compared to a 27 mpg gasoline vehicle. Charging infrastructure costs and installation may be a unique challenge, however, since car sharing typically relies on parking spaces that are owned by someone else.
  • Fleets can get better pricing on large vehicle orders, helping to offset the price premium on electric cars. As smaller car share companies expand or larger rental car companies like Avis get in the game, their buying power will grow. Buying power not only reduces the upfront purchase cost, but could also mean profitable resale of used vehicles, as this article suggests.

Benefits to car share members and automakers

Adding EVs to car share fleets won’t just benefit companies like Avis and Zipcar, but could also be a big step forward for advanced vehicle technology and for drivers seeking cleaner vehicle choices.

  • Including plug-in vehicles in car sharing fleets would increase member access to the cleanest, most advanced technology vehicles available without the upfront cost. It’s the same benefit currently offered by car sharing with other vehicles, but the current price premium for electrics is a distinct barrier in the early market of this technology and not everyone can take advantage of the federal $7500 tax credit or other incentives.
  • Car share provides a great showroom for electric vehicles. One challenge EVs face, just as hybrids did in their early market introduction, is that most people haven’t ever driven one. A 5-minute test drive at a dealership just doesn’t cut it when trying to get a sense of what an electric vehicle is all about. So automakers benefit by not only selling electric cars to car sharing fleets, but also increasing consumer awareness about their products, which could lead to greater sales – both to car share companies as well as individual sales. There are car share members who may never consider buying a car, but I imagine that there are plenty of folks like myself who are both car owners and car share users, or others who don’t own a car now, but could be in the market for a new car someday down the road.

Car sharing and EVs – What’s next?

As it turns out, I’m not the first person to observe that EVs may be a good fit for car sharing. In various places throughout the country, electric vehicles are becoming more accessible to car share members. Zipcar has been adding battery electric and plug-in hybrids to their fleet, as have others. BMW’s DriveNow program in San Francisco has a fleet of battery electric ActiveE’s for rent, while the Car2Go program in San Diego offers EV Smart Car rentals by the minute. Houston is getting in the mix too, with EV car sharing as part of its city municipal fleet. Outside the U.S., EV car sharing is also catching on with programs like Paris’ Autolib and a Berlin program planning to offer EVs that fold up.

Will the trends of car share continue to gravitate towards electric vehicles? My hope is they will, but it may take a strong voice from car sharing members to keep up the pressure as more traditional rental car companies get into the act. The Avis-Zipcar deal has certainly raised fear among fans of Zipcar, along with accompanying pleas to not screw it up.

So what do you think – are EVs a good fit for the growing car share market? Will car sharing be a bright spot for electric vehicles?