The value of the global electric vehicle (EV) rental market is expected to surge to US$18 billion (R328 billion) before 2028 but South Africa’s car rental experts believe it’s unlikely the country will experience this type of growth in the sector anytime soon. Hybrid vehicles are expected to occupy the eco-conscious niche in sub-Saharan Africa for some time.

Data released by Technavio, a global technology research and advisory company, finds the EV rental market should grow at a compound annual growth rate of 16,68% – driven by international tourism growth increasing demand for rental vehicles.

Advances in battery technology are enhancing the performance of these rentals and an increasing number of consumers in Europe, Asia and the US are opting for eco-friendly transportation options.

SA infrastructure lags

EV rentals in South Africa have not seen significant uptake at all, says Sandile Ntseoane, General Manager of Southern African Vehicle Rental and Leasing Association (SAVRALA).

“The adoption rate of EVs in the South African car rental space is so negligible that SAVRALA has no basis to collect data.”

Technavio’s research notes challenges in developing countries’ car rental markets include increasing power demand due to growth in EVs and uncertain power supply.

The country’s infrastructure is simply not ready, Ntseoane said. “If you are travelling to Mpumalanga as a tourist, for example, there are no charging stations. There has been some improvement but not across the country – even at airports.” EVs are also too expensive for the South African market, he added.

Julian Visagie, CEO of Hertz South Africa, said: “There are still a lot of unknowns. When tourists are on holiday in a foreign country, they may be unsure about the location of charging facilities or how they operate, which could make them hesitant to use an EV.”

Sustainable solutions

Although the adoption rate of EVs in the car rental industry is low, there is focus on sustainability.

“We are all under pressure to improve the sustainability of our businesses and reduce our carbon footprints. Demand for sustainable options, especially in the corporate space, has increased,” Visagie pointed out.

However, these clients are more likely to opt for one of Hertz’s hybrid vehicles. “We started bringing plug-in hybrids into our fleet about two years ago. This has a battery as well as a normal internal combustion engine. Once the battery runs flat, the car switches to the normal engine, which can then charge the battery,” Visagie explained.

This reduces emissions and fuel consumption.

“Clients are happy to book the hybrid. I think that is where the market will go first. In the next 12 to 18 months, we’ll see more plug-in hybrids coming to South Africa,” predicted Visagie.

Availability of local and imported electric cars is limited in South Africa, which influences their uptake, said Senzo Madikane, Marketing Manager for First Car Rental.

“As more new energy vehicles are introduced to the market under South African legislation, we intend to expand our fleet with these models.”

First Car Rental plans to increase its hybrid models to reduce carbon emissions. “While we, as users rather than manufacturers of cars, have limited influence over the availability of EVs in South Africa, we remain committed to incorporating more of these vehicles into our fleet as they become available,” said Madikane.