Amid government efforts to promote green cars and reduce emissions, driving around in an electric vehicle (EV) may soon become a more popular lifestyle choice.
The latest effort to encourage people to embrace the new cars is offering EV rental services.
Shanghai has been designated as one of China's EV pilot cities, and Shanghai-based eHi Car Services will launch an EV leasing service in Jiading district starting from April.
According to CEO Zhang Ruiping, the company will offer 200 Roewe E50 cars manufactured by Shanghai Automotive Industry Corp in the first half of this year.
It will cost from 100 yuan ($16.09) to 150 yuan to rent an EV for a day, and the firm might consider renting EVs to customers on an hourly basis if there is demand for such a service, Cai Lihong, head of marketing and sales at eHi, told the Global Times.
The rental period can be from one day to a few weeks for individual consumers, and one to two years for corporate clients, Cai noted.
Steer the right course
The government has been encouraging the use of EVs in China by providing a subsidy of 120,000 yuan to buyers of a new-energy car. Another initiative to attract green car owners is that they don't have to pay for license plates. Shanghai issued the first EV license in China in January this year.
But despite government support, progress in the EV market has been slow. Only 13,000 new-energy cars were sold in China last year, according to data from the China Association of Automobile Manufacturers. The government's development blueprint released in July 2012 called for 500,000 new-energy cars, including EV and hybrid cars, to be sold by 2015.
Renting EVs is seen as a way to encourage more drivers in China to try using the cars and expand the market.
"It is expensive for consumers to buy an EV and there are difficulties in charging and maintenance," Zhang acknowledged. "But renting an EV can ease these concerns. They only need to pay a small amount for the rental fee and they can experience driving an electric car at the weekend," he said.
EVs are suitable for use in large, densely populated cities such as Shanghai, said Zhang Dawei, CEO of EV dealership Shanghai TZGEV, which is responsible for maintaining the EV facilities and after-sales services for the eHi project.
"People in Shanghai usually drive a distance of not more than 50 kilometers a day, so renting an EV would suit them," he noted.
"Through rental, drivers can use EVs more in their daily lives. If EV rental becomes more popular, there will also be more charging facilities across the country," said Zhang.
More firms joining in
After eHi, China Auto Rental, China's largest car rental company, will be the next in line to venture into the EV rental business. The company is going to offer EV rental services in the next few months in major Chinese cities such as Beijing and Shanghai where more charging facilities are available, said its PR director Cui Rui.
"It is uncertain whether people will like renting EVs because only a few have tried it before, but we are optimistic that many customers want to experience driving new-energy cars," Cui told the Global Times Tuesday.
China Auto Rental will offer about 100 EVs initially, and will expand the number according to demand, he noted.
Driving an EV is still a novelty in China and many are eager to try it.
Li Weiping, a Shanghai resident in the home furnishings business, said he would rent an EV when the service begins.
"It's cheap to rent, environmentally friendly and is suitable to drive over a short distance from home to the office," Li told the Global Times Wednesday.
But he would not want to buy an EV, because sometimes he has to drive over longer distances to other provinces and it would be difficult to find places to charge the car, he said.
Li also hasn't heard of any problems with the safety of EVs, but that's partly because very few people have driven them, he said.
US-based car rental company Hertz Group started offering EVs for rent to Chinese consumers in August 2011, using the BYD e6. It was the first overseas car rental company to offer such services in China, according to media reports.
Calls and an e-mail to the marketing department of the Hertz Shanghai office were not returned.
The prospects for EV rental may seem to be promising, but experts said it would be hard for the car rental companies to make money from the new service as the lack of charging stations remains the biggest obstacle in the use of electric vehicles.
"Car rental companies will have too many responsibilities in building a network of charging facilities and changing batteries for users," Zhang Zhiyong, a Beijing-based independent auto analyst, told the Global Times.
Zhang also said that Chinese consumers are likely to have a lukewarm reaction to EV rental, because although the price of renting one is competitive, convenience and safety are still the major concerns for consumers.
"Consumers want to know whether charging facilities are accessible and whether the electric batteries might ignite," he pointed out.
"The EV industry is still in its infancy in China," said Zhang. "There will need to be an upgrade of technology for the market to mature."
The car industry has constantly called for more government support to build more charging stations.
Cao Guangyu, deputy manager of Shanghai International Autocity Development Co, said there were a total of 640 charging stations in downtown Shanghai by the end of last year. He said Shanghai's economic planning authorities are soon going to introduce plans for the building of more charging stations in the city, without disclosing more details.
Miao Xu, minister of Industry and Information Technology, said during the two sessions earlier this month that the government is studying policies for the new-energy sector, including an increase in subsidies, and will try to introduce these policies in the first half of this year.