With consumers becoming less interested in purchasing electric vehicles thanks to issues such as range anxiety and high prices, fleets have quickly become a major market for electric vehicle companies. Rather than developing EVs with the hope of selling them individually on the market, EV companies such as Tesla are hedging their bets by partnering with company fleets to produce hundreds or even thousands of EVs for only a few customers.
Data shows that Tesla and Chevrolet have seen the greatest success in the EV fleet segment. Major customers in this segment include corporate and government fleets as well as daily rental fleets. These types of organizations make up the bulk of the EV industry’s secondary market. According to data from S&P Global Mobility, Tesla is the most dominant player in the EV fleet segment.
This conclusion came after the Texas-based EV maker recently signed a massive $4.2 billion deal that would see it supply 100,000 Model 3 units to car rental giant Hertz. This announcement came despite the fact that Hertz has announced that it is scaling back its electrification goals due to low resale value (caused by Tesla’s ongoing price cuts) and high repair costs. Meanwhile, the Tesla Model 3 accounted for 23% of all electric vehicle fleet sales in 2022, followed by the Chevrolet Bolt.
Compared to the Model 3, which sold 28,252 units to the EV fleet market from July 2022 to July 2023, the Chevrolet Bolt accounted for 16% of the market with 19,502 units sold. Tesla’s Model Y was third at more than 11,000 units sold in the same period followed by the Ford F-150 Lightning, currently ranked as the most popular electric truck among the EV fleet segment.
Although several issues make owning a personal electric car tricky, fleets can circumvent many of these issues. The companies buying electric cars for their fleets often have large budgets and don’t have to prioritize prices. Furthermore, having a single operational point for all electric cars ensures one central location where EVs can return to charge overnight before hitting the road again.
Strict carbon emission and electrification goals will require that all fleets in the country take steps to minimize their tailpipe emissions by electrifying their vehicle lineups. Companies such as Tesla, Chevrolet and Ford, which have created popular offerings, can maintain their profitability by selling to fleets even as consumer demand for battery electric cars drops.
The opportunities offered by cornering the fleet vehicle market could boost the sales of EV automakers such as QuantumScape Corp. (NYSE: QS) if they come up with offers that appeal to fleet operators in different market segments.
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