China’s Car Rental Industry Shifts Toward Greener, Smarter Fleets as NEV Penetration Reaches 64.5 Percent

Dragon Media News Desk

China’s car rental providers are accelerating the transition toward greener, smarter and more technology-oriented fleets as the use of new energy vehicles continues to expand across the country.

According to the automotive market research branch of the China Automobile Dealers Association, domestic retail sales of passenger vehicles were projected to reach approximately 1.52 million units in July. New energy vehicles were expected to account for 980,000 units, raising their market penetration rate to a record 64.5 percent.

The growing popularity of NEVs, their lower operating costs, changing consumer preferences and China’s national carbon-reduction policies are reshaping competition in the car rental industry.

Major rental companies are restructuring their fleets and steadily increasing the number of new energy and intelligent vehicles available to customers.

In July, Chinese electric vehicle manufacturer XPeng Motors delivered 1,300 NEVs to rental provider CAR Inc., expanding the large-scale use of new energy vehicles in daily rental operations.

A senior CAR Inc. official said the company purchased approximately 100,000 new vehicles in 2025, with NEVs accounting for nearly half of the total.

Other major providers, including eHi Car Services and Trip.com Car Rental, are also expanding their ranges of new energy models and making NEVs a central part of their vehicle supply strategies.

Since the beginning of this year, eHi Car Services has received 1,000 smart sport utility vehicles from Geely Auto Group and 2,000 smart vehicles from Guangzhou Automobile Group.

Rental providers are not only transforming their fleets but also upgrading their digital services to match the rapid expansion of smart NEVs.

In July, CAR Inc. introduced a dedicated intelligent-driving section within its mobile application. The platform combines NEV model selection, explanations of intelligent features, vehicle recommendations and artificial intelligence-powered question-and-answer services in a single portal.

Covering more than 40 leading NEV brands, the system allows customers to access information ranging from vehicle selection to practical guidance on using smart features.

Industry experts say the accelerated deployment of new energy and intelligent vehicles is being driven by both operational considerations and changes in consumer demand.

Ou Guoli, a professor at Beijing Jiaotong University, said NEVs generally have lower operating costs than conventional fuel-powered vehicles.

As consumers become more comfortable with intelligent driver-assistance technologies, car rental is also becoming an important channel through which users can experience new energy and smart vehicles before purchasing one, he said.

Some consumers now rent NEVs during holidays or longer journeys to test intelligent-driving functions, energy consumption and actual travel costs. Such experiences increasingly influence their future vehicle-purchasing decisions.

In the past, intelligent-driving capability was not a major consideration because the technology was less mature. Consumers focused more heavily on cabin space, functionality and comfort.

As vehicle models become increasingly diverse and technologically differentiated, however, intelligent driving is emerging as a major factor in vehicle selection.

Gao Dewu, chief executive officer of CAR Inc., said a growing number of young consumers now consider intelligent-driving capability when deciding which vehicles to rent or purchase.

Zhang Yejia, general manager of the automotive industry division at CCID Consulting under China’s Ministry of Industry and Information Technology, said the expansion of NEV fleets is being shaped by both national policy and vehicle asset management requirements.

China has set dual carbon goals of peaking carbon dioxide emissions before 2030 and achieving carbon neutrality before 2060.

As those goals are implemented, some cities have introduced minimum requirements for the proportion of NEVs in commercially operated vehicle fleets, Zhang said.

Purchasing new energy vehicles is therefore no longer merely a competitive advantage for rental providers. In some cities, it is becoming a basic requirement for regulatory compliance.

The continued upgrading of NEV fleets is expected to reshape both the business models and service systems of rental companies.

Providers are developing differentiated smart-vehicle fleets tailored to specific travel scenarios while using intelligent technologies to improve fleet utilisation and operational efficiency.

Zhang said rental companies could also expand into services connected to charging, parking and cultural tourism, creating a more integrated travel experience from the beginning to the end of a journey.

Ou said the global automotive industry is rapidly shifting toward new energy and intelligent technologies, and rental companies are seizing emerging opportunities through large-scale vehicle purchases aligned with that trend.

Competition in the car rental industry is therefore expected to move away from price-based rivalry toward value-based competition centred on technology, service quality and user experience.

The ability to build integrated service systems combining intelligent mobility, energy supply, charging, parking and tourism is likely to become a decisive factor in the industry’s long-term competitiveness.