Viable EV Rental Business Models
The Electric Vehicle category applies to various types of vehicles including electric cars, bikes, motorbikes, golf carts, and trucks. For building a profitable EV rental business, it is essential to identify the business model where you can mount your efforts and expect maximum returns. Today, 4 viable EV rental business models are the most worthy of your consideration. To effectively capitalize on them, founders need to develop EV rental websites and understand the business workflows.
1. Electric Car Rental (Followed by Sixt, Hertz, and Avis)
The most obvious venture is launching an electric car rental business. Electric cars are family-friendly vehicles that can be used to cover larger distances than eBikes and motorbikes and also have a larger ticket size. The emergence of many car manufacturers in the EV industry, such as Tesla, Volkswagen, General Motors, and BMW has further escalated the excitement for EVs among car enthusiasts.
Workflow of an Electric Car Rental Website
- The business owner creates multiple listings on the website and sets rental prices for days, weeks, or months
- Customers select their preferred car and pay the rental fees inclusive of a security deposit to place a booking
- The customers either pickup the electric car or the business owner arranges a delivery for order fulfillment
- When the customer returns the car, the business owner can use the security deposit to reimburse any unexpected damages or levy late return charges
How the Electric Car Rental Model Holds Value for Customers?
- Electric cars are family-friendly vehicles and can be used to go on family trips
- Electric cars have a significantly higher kilometer/mile range than other type of EVs
- Due to low cabin noise and vibrations, rides in electric cars are way more comfortable than in gasoline cars
- Due to their high price point value and advanced technology image, electric cars are also a status symbol in many developing regions
2. eBike Rental (Followed by Zoomo, Lime, and Trek)
Not to be confused with electric motorbikes, the eBike rental business model has already been very successful in many parts of the world including China, France, Germany, the UK, the USA, Canada, Hungary, Italy, and Norway. In the US, the reported compound growth rate for the eBike rental industry is a whopping 18.5%. Although eBike cannot accommodate entire families, they are perfect electric vehicles for micromobility and solo trips.
Workflow of an eBike Rental Website
- The business owner lists eBikes on the website and rents them for hours, days, or weeks
- For booking, customers pay the rental fees inclusive of add-on insurance charges
- The customers either pickup eBike from the website’s offline store or docking stations
For maintenance purposes, the business owner routinely visits the docking stations and inspects the eBikes for any damages. In case of any damages, the same are repaired under insurance.
How the eBike Rental Model Holds Value for Customers?
- eBikes rentals are very cost-effective and can be used for covering short distances
- eBikes are more eco-friendly than electric cars
- Can be used for traveling in cities with narrow lanes
- Can be easily found and rented through local docking stations
- There is no need to deposit a rental security amount
3. EV Rental with Chauffeur Model (Followed by EVChauffeur, iChauffeur, Blacklane)
This business model is similar to the electric car rental model with one key difference. Instead of renting out a self-drive car, the customers get a personal chauffeur along with their rented vehicles. The chauffeur drives them around throughout the day and is also responsible for the safe parking and return of the car.
Workflow of Chauffeur Services Website
- The business owner creates multiple car listings on the website and rents electric cars on a day-to-day basis or for planned tour packages
- Customers select their preferred car and pay the rental fees inclusive of add-on personal insurance
- A chauffeur arrives to pick up the customers from the pickup location and drives them to their desired location(s)
Any damages or injuries that happen during the rental duration are covered under the insurance.
How the Chauffeur Model Holds Value for Customers?
- It is most suited for certain audiences, for example, teenagers and tourists who do not have a valid driving license or cannot drive a car because of some other circumstances
- Highly convenient for exploring new cities when customers are not aware of the routes
- Convenient for traveling at night time and other odd hours
- Does not put any strain on customers as they are not the ones driving
Battery Swapping Business Model (Followed by Gogoro, Mo Batteries, and Ample)
The battery-swapping business model includes the exchange of drained batteries with fully charged batteries. The swapping can be done via automated assembly lines (preferred for electric cars, for example, check out Ample) or manually (preferred for eBikes, for example, check out Gogoro). The primary target audience for the battery-swapping model is electric vehicle owners who prefer to travel via their own vehicles. Battery swapping stations along their routes are an added comfort for EV owners. Also, as the battery-swapping business model is considerably new in many markets, it can provide a first-mover advantage to entrepreneurs.
Workflow of Battery Swapping App/Website
- Customers manually enter their location in the app or via GPS to find nearby battery-swapping stations
- The app navigates them to the battery-swapping station
- Customers get the battery swapped and pay the charges
In the case of fully-discharged batteries that can no longer be used to power electric vehicles, they can be used for storing solar energy or sold to private or public agencies for the same purpose.
How the Battery Swapping Model Holds Value for Customers?
- It only takes 2-5 minutes to swap an EV battery in comparison to charging, which can take up to hours
- Customers don’t need to rely on rented EVs, they can buy and use their own EVs for traveling
- Battery swapping stations add more intercity route options for EV owners
- Can reduce the downtime for commercial fleets and transportation businesses
Industry Leading Software Tech to Capitalize on EV Rental Business Models
The Complete Roadmap to Build an EV Rental Store
After closely assessing the aforementioned business models and finalizing the one as per the needs and requirements of your target market, you will require a strategic roadmap to help you capitalize on the business. The following roadmap emphasizes all key elements of an EV rental business and provides extensive knowledge of everything you need for your startup.
1. Business Planning
Business planning involves preparing a rough outline of all those elements that will give shape to your business and help in its proper execution. A business plan is also very helpful for startups as it helps in managing the business for the first few years. Although a business plan does not have any fixed template, it can be inclusive of the following things:
- Executive summary
- Market research
- Consumer research
- SWOT analysis
- PESTLE analysis
- Competitor analysis
- Supply chain model
- Business model canvas
- Business goals
- Marketing strategy
- Budget and financial projections
2. Licenses and Permits
The business licenses and permits required to launch a business depend on the state and federal laws. Thus, to get an accurate idea about the licenses required to launch an EV rental business in your target region, it is wiser to consult a local licensing authority. At the minimum, you may require environmental permits, zoning permits, employer identification numbers (EINs), and business insurance.
3. Intellectual Property
Decide and register your intellectual property such as business name, marketing name, logos, slogans, and taglines. As you will need a website to run your online EV rental business, you are required to register a domain name as well. Get a domain name that matches your marketing name or has some resemblance to it. Doing so will assist you at a later stage in digital marketing, branding, and providing an overall better customer experience.
4. Software Technology
To power the online store, you need some software technology that can provide a fast and easy-to-use front end with the option to handle bookings and collect online payments. However, regular eCommerce solutions and page builders are not very useful for developing an EV rental store.
Just to accept rental bookings, your store requires a booking calendar that can display vehicle availability and take rental date inputs. The rental invoicing is also more complex than sales invoicing. It includes more variables such as rental dates, security amount, and rental add-ons. Before finalizing the order, your store needs a rental agreement module that can help you rectify your terms and conditions. Thus, only dedicated rental software solutions match our criteria. Read below to learn more about the essential features required in your rental software and our recommended solution.
5. Key Features
Continuing from the previous point, here’s a list of all the essential features to look for in your EV rental software. Scroll below to read these features in detail.
|Common Features in All EV Rental Models
- Map View Filter
- Fleet Management
- Monthly Subscription
- Order Management
- Discounts and Promotions
- Reports and Analytics
|eBike Rental Model
|Electric Car Rental
|Battery Swapping Model
- Locking System
- Prebooking at Docking Station
- Traveled Distance Tracking
- Phone Unlock
- Late Returns Management
- Rental Booking Calendar
- Agreement Management
- Tiered Pricing
- Rental Security Management
- Document Verification
- Vehicle Comparison
- Late Cancellations Management
- Late Returns Management
- Inventory Management
- Phone Unlock
Map View Filter: A map view filter is a GPS-enabled interface to help customers find nearby eBikes and battery swapping stations in real-time. It can also guide them to the docking stations for dropping eBikes.
Fleet Management: A comprehensive fleet management system is essential in the eBike rental model. The system will incorporate features such as battery overview, GPS tracking, overdue returns tracking, custom stock level alerts, maintenance syncing, etc.
Inventory Management (Battery Swapping): An inventory management module will update a battery swapping station on real-time EV availability. Some other features that it will include are battery status and battery health diagnostics.
Rental Booking Calendar: As explained earlier, a rental booking calendar is important to display EV availability to customers and accept rental date inputs. It also assists in preventing double booking and generating accurate invoices.
eWallet: Having an eWallet simplifies renting for customers, particularly for target audiences such as daily commuters (students and corporate employees) and tourists. With their eWallet balance, customers don’t need to make manual payments every time they rent an eBike.
Locking System: A cloud-based locking system is required for those businesses that want completely automated docking stations. As they don’t need to hire local operators, the system helps in reducing operational costs.
Prebooking at Docking Stations: For helping customers who are highly reliant on eBikes for transportation, for example, daily commuters or tourists, a prebooking option can be provided to reserve an eBike at the nearest docking station.
Traveled Distance Tracking: A high-demand feature in the 21st century is speed and traveled distance tracking. This feature serves multiple purposes in different EV models. For example, it helps promote the use of eBikes in eBike rental and can be used to show battery performance for electric car fleets.
SOS: An SOS feature will provide quick alerts to local emergency services and the business owner in case of any unforeseen events. This feature is required to ensure the safety of customers and is highly demanded. In some countries, the SOS option allows customers to select an emergency number instead of directly sending an alert.
Rental Booking Calendar: As explained earlier, a rental booking calendar is important to display EV availability to customers and accept rental date inputs.
Agreement Management & eSign: While launching your EV startup, you may have certain terms & conditions, such as usage policy, cancellation policy, parking policy, etc. To sanction them, you need an agreement management module with an eSign option.
Tiered Pricing: While some customers may want to rent an EV for a few days, others may require it for some weeks. To attract the audience that wants to rent EVs for a longer time, you can set a pre-discounted weekly rental price. The same can be done for monthly rentals. However, to apply daily, weekly, or monthly rental pricing, you need a tiered pricing module.
Monthly Subscription: Alternatively, you can also charge a monthly subscription fee for unlimited eBike rentals and battery swapping.
Rental Security Management: Certain EV rental business models require you to rely on rental security deposits for reimbursing any damages or for just encouraging safe driving. A rental security management system will allow you to collect that rental security and use it for reimbursement as well.
Wireless Key or Phone Unlock: For theft prevention in eBikes, a phone unlock option can be provided to paying customers. Gogoro, a global eBike rental and battery swapping company provides a digital key in Apple Wallet, which can be used via both iPhones and iWatches.
Document Verification: For confirming the age of the drivers and verifying other details such as address proof, business ID (in B2B relationships and operations), and more, EV rental stores require a document verification module.
EV Comparison: Every customer has separate vehicle preferences and requirements, particularly in electric cars. For example, some may require more boot space while some prefer features such as cruise control and ADAS. A vehicle comparison module will assist customers in finding the right vehicle by creating automated comparison tables.
Late Cancellations Management: In case of late cancellations, the business owners have to face losses in terms of order processing costs, which can be inclusive of EV cleaning, charging, and hourly labor costs. Likewise, late cancellations mean lost opportunity costs as well. To recover such losses, a late cancellations management module is required. It allows the business owner to define multiple cancelation periods and levy cancellation charges accordingly.
Late Returns Management: Similar to late cancellations, late returns result in lost opportunity costs as the business owner is not able to fulfill the next booking. Likewise, a late returns management module is important to encourage timely returns as well.
Order Management: On the admin dashboard of your EV rental website, order management options are required to view and edit orders, check payment status, and customer details, track order history, mark refunds & cancellations, and more.
Discounts and Promotions: You can enhance your marketing funnel and increase customer acquisition by introducing routine discount campaigns such as loyalty programs, gift cards, discount codes, bulk order discounts, rental order discounts, etc. For handling promotions, a comprehensive homepage banner and slider can help.
Analytics and Reports: Analytics are the backbone of all sales and marketing decisions. In-depth analytics will help you find out your revenue generation, top rented EVs, most demanded add-ons, sales performance, and more. Certain rental software also support Google Analytics integration to provide you with even more insights.
Get a Fully Customizable Software to Build your EV Rental Project
6. Other Requirements
At this stage, you have pretty much figured out all the major prerequisites required to set up your EV rental business. However, for execution and solid launch, it is wiser to work on the following requirements as well.
- Garage or Parking Facility: For parking EVs, you need some type of garage or parking facility. These can be rented at malls or corporate offices. For eBikes and eScooters, you can opt for docking stations as well. Docking stations are also more cost-effective to set up and expand your area of operations.
- EV Chargers: At your parking facility, you will need EV chargers to recharge batteries. There are two types of EV chargers, which are AC chargers and DC chargers. While DC chargers provide fast charging speed and can charge an entire electric car within an hour, AC chargers can take up to 6 hours. However, for eBikes, AC chargers are highly compatible.
- Mechanics and other Human Resources: Instead of paying repeated visits to service stations, it is wiser to hire a mechanic to service and repair EVs. Likewise, you will also need a small marketing team to help you promote and grow your business. An alternative to hiring the team is that you can learn digital marketing yourself and execute marketing campaigns. This approach may be more cost-effective but does not guarantee promising returns. Also, while hiring a marketing team, make sure they are experienced in marketing startup businesses.
- Maintenance Supplies: For the proper maintenance of your fleet, you need to invest in certain maintenance supplies such as cleaning supplies, coolants, brake fluid, washer fluid, tire pressure monitor, tire inflator, lubricants, air filters, car jacks, etc.
7. Go-to-Market Strategy
The Go-to-Market (GTM) strategy is a well-defined plan to help you establish a base in the targeted market. It focuses on making a strong entry into the market and spreading awareness about your product or services to consumers. Furthermore, having a GTM strategy gives direction to your marketing efforts and helps accomplish realistic goals, for example, getting the first 100-1000 customers within a specific timeframe or gaining traffic on your EV rental website.
GTM strategy is defined into 7Ps that you can check below:
Product: The product that you will be marketing here is not the EVs but your online store from where customers can easily rent out EVs. Devise your unique value proposition and focus on creating an appealing brand image.
Promotion: This refers to finding out the various platforms to market your product, inclusive of paid, owned, and earned media. For an EV rental business, you should primarily focus on social media marketing, local SEO, and referral marketing within your friends and family network.
Price: The pricing strategy of your business can help in penetrating new markets. For detailed information on setting rental pricing for your EVs, you can take a pricing strategy reference from this blog.
Place: This refers to the touchpoints from where you can deliver your services. In the EV rental industry, these can be your online website, docking stations, offline stores, and parking facilities. To help people get acquainted with electric vehicles, you can also collaborate with hotels, restaurants, and malls and rent out EVs at their locations.
People: Find out more about your target market. For in-depth analysis, go beyond the demographic profiles and try to understand their psychographics, which refers to what motivates them to rent EVs and what are push-pull factors.
Process: Refine your methods of delivering the service, including fulfilling the booking and handling returns, customer support, etc. This will help enhance the overall customer experience.
Physical Evidence: Tangible evidence for social proofing, such as testimonials, reviews, and mentions in third-party content validates your service and creates a sense of enthusiasm in customers. They become more willing to try your service with less skepticism.
Capitalizing on the EV rental market? Here are some key takeaways to remember. There are four primary EV rental models to choose from, which are electric car rental, eBike rental, eChauffeur service, and the battery swapping model. To launch a business in any of these niches, you need a rental website powered by reliable rental technology. Additionally, you also need to focus on certain prerequisites such as the business plan, intellectual property, licensing, human resources, parking facility, and a Go-to-Market strategy.
With all the efforts properly aligned toward launching your EV rental store, there’s a high chance of gaining a competitive edge and first-mover advantage in many geographic regions. Over time, you will understand your business even more and will be able to multiply your returns on investment.
Q1: Can I combine both electric vehicles and gasoline vehicles in my rental fleet?
Ans: Yes, your rental fleet can include both electric vehicles and fossil fuel vehicles but you may need to rethink your value proposition from providing green mobility solutions to something else. In case you want to move to fossil fuel vehicles later, you will need to rebrand your entire online store. Thus, it is wiser to keep clarity between what type of vehicles you want to rent out (EV or traditional fossil fuel vehicles) right from the beginning.
While the benefits of starting an EV rental store are mentioned above, launching a car rental store can have its own set of benefits including:
- A diverse target audience
- Diversification of rental fleet and value offerings
- Less or minimum investment in charging infrastructure
- Increased scope of business in geographic areas where EV preference is still developing
For more information on launching a car rental website, check out these blogs: For single–vendor car rental website, and multi-vendor car rental marketplace like Turo.
Q2: How do I get started with FATbit’s Yo!Rent to launch my EV rental store?
Ans: To get started with Yo!Rent, there are 4 simple steps to follow:
Get Yo!Rent’s lifetime usage license inclusive of any customizations (Contact our Team)
- We will carry out the customizations and install Yo!Rent on your servers
- Set up primary pages and upload EV listings.
- Start renting. Use Yo!Rent’s in-built features to manage your store.