Why Electric Vehicles are Right for Carsharing Companies

 In Fleet Sustainability

With a steady growth in popularity over the past decade, carsharing is now a major global industry. By 2014 when the last data was collected, there were 300 car share organizations (CSOs), operating in over 1,000 cities in 33 countries.

The World Health Organization estimates that 70% of the global population will live in cities and towns by 2050, increasing from just 50% today. This rapid urbanization is putting greater pressure on city road networks and air quality levels, which in turn is promoting the expansion of the on-demand mobility model.

Carsharing has thrived in this new landscape, and market observers predict that it will see continued growth in its current markets of North America, Europe, and Asia-Pacific, as well as expansion into developing markets such as Brazil, China and India.

In 2014, there were 4.8 million registered car share users and by 2020, market research firm Berg Insight predicts that global membership will reach 26 million.

Carsharing members graph

Source: http://www.berginsight.com/ReportPDF/ProductSheet/bi-carsharing-ps.pdf

Car Share User Demographics

According to the Transportation Sustainability Research Center (TSRC), carsharing and other shared mobility services have risen to prominence on the basis of demographic shifts and societal attitudes toward car ownership.

A report by the TSRC found that car-sharers tend to be environmentally conscious, with the greatest change being in one car households becoming car-free due to car sharing; then 2 car households downgrading to one.

Studies have also indicated that the millennial generation is moving away from car ownership, and embracing carsharing and ridesharing technologies instead. This is particularly the case in big cities, where the costs of city living make car ownership unaffordable for many.

Carsharing companies have also penetrated university campuses. Zipcar currently has bases in 300 universities and college campuses across the US.

These user demographics and environmental preferences strongly support the case for strengthening a carsharing fleet with electric vehicles, or substituting out internal combustion engine vehicles (ICEs) for electric.

Suitability of EVs for Carsharing

Business intelligence firm Berg Insight’s market report found that “Electric cars are a natural fit for carsharing”. This is a conclusion shared by many industry experts and CSOs.

As many carshare users choose not to own a car for environmental reasons, the EV’s low emission status is a clear benefit. This also makes them a favorite of city lawmakers looking to improve air quality standards.  

The average usage period of a carshare vehicle is between two and four hours, and journeys are generally of a short distance, with the grocery store being one of the most common destinations. In London, 90% of all car trips are less than 10km (6.2 miles). These journeys are well within an EV’s range and for within-city driving, even EV models with lower top speeds are suitable for this purpose.

Cost is another advantage of switching to electric. The CSO benefits from reduced fuel costs and lower maintenance costs due to the comparative simplicity of the electric drivetrain. They are also able to apply for federal tax credits and subsidies to assist in purchasing EVs.

Two examples of vehicles designed specifically for carshare use are the Bolloré BlueCar used by Autolib’ in Paris, and the Smart Fortwo Electric Drive vehicles used by Car2Go in San Diego, Amsterdam, Madrid, and Stuttgart. Designed to be small, narrow, and light, they are easy to park and maneuver in the city, and demand little of their electric drivetrain.

Auto manufacturers are keen to use carsharing as a way to drive EV adoption. According to Navigant Research, the adoption of EVs in carsharing services is expected to increase as automakers continue to promote this technology.

Taking a Harder Line on EV Adoption

Transitioning your carsharing fleet to electric gives you the opportunity to benefit from a loyal customer base of environmentally conscious customers, be eligible for government grants and subsidies, and reduce the operational costs of your fleet.

But with a variety of EVs on the market, CSOs must be careful to choose a vehicle that will be suited to the role they will be used for. Investing in the wrong EV will not only cost you time and money, but will also risk diminishing your brand image and losing your members. In order to safeguard your business from this risk, you need access to comprehensive fleet data to make informed decisions.

EVSA for Carsharing Fleets

Any CSO planning to make use of EVs will need to study their duty cycles and other patterns of use. These feasibility studies are best completed well in advance of investment, as they can inform vehicle purchasing decisions and budgeting.

FleetCarma’s Electric Vehicle Suitability Assessment (EVSA) is the only solution on the market that allows you to accurately forecast fleet performance before deploying an EV.

FleetCarma collects high-quality vehicle-side data from your entire fleet of vehicles, analyzing and running efficiency diagnostics to produce a final report. This report lets you forecast the effects of your purchasing decisions. It also supports budgetary decisions by accurately forecasting ROI.

This allows you to:

  • Forecast fleet wide savings
  • Understand the total cost of ownership per vehicle
  • Evaluate multi-year procurement plans, tailored to your fleet
  • Forecast the reduction of GHGs based on possible fleet compositions

Electric vehicles are a perfect fit for carsharing fleets and will become increasingly desirable to meet growing consumer demand. However, it’s important to select the right vehicles for the role. With FleetCarma’s EVSA, you can be confident that the deployments you make will deliver positive ROI from the outset.

Interested in this topic? Download our free “Why Carsharing Companies are Perfectly Positioned to Adopt Electric Vehicles” guide today.

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