Geely launches electric car rentals

Move may herald new solution to cities' chronic traffic woes

Zhejiang Geely Holding Group, a leading private automaker in China, launched an electric car rental service in Chengdu, capital city of Southwest China's Sichuan Province, in December 2014, promoting on-demand car sharing to citizens as an option to car ownership.

Kandi Electric Car Group, a joint venture set up by Geely and Kandi Technologies Corp, had already initiated a similar program in Hangzhou, capital city of East China's Zhejiang Province in September 2013.

With China's growing demand for automobiles and increasing traffic pressure in cities, the new business model may be a new option for urban residents.

Chengdu projects

Geely and Chengdu-based auto dealer China Ekingo Corp jointly started the electric car rental service in Chengdu in December 2014 and has 1,000 vehicles available as of now, a staff member working for the car rental project, who asked to remain anonymous, told the Global Times Monday.

The service is proving popular in the local market, she said, but did not reveal how many users the service has gained.

"We plan to provide 5,000 electric cars for rental in 2015," she said.

There are two types of electric cars to choose from, a car for two passengers and a car for four passengers, according to Ekingo's car rental introduction on its Sina Weibo.

Among the rental deals, which range from one year to three years, the average daily rental cost of a two-seat electric car for one year is 16 yuan ($2.60) per day and 19 yuan for a four-seat vehicle per day, according to the company's website, with the cost declining for longer rental deals.

As for charging facilities, which is consumers' biggest concern when it comes to green cars, the staff member said that users will receive a charging cable for each car and charging can be done on a regular power supply, taking about six hours to fully charge a car.

According to the staff member, there is only one service site in Chengdu now, which means renting and return can only be done there.

Having to do the charging themselves will put off potential users as the majority of communities, especially older ones, have no power sockets in parking lots, Gao Jian, an industry analyst at Shanghai-based consultancy LMC Automotive, said on Monday.

However, considering the public's doubts over electric cars, rental services are a good start for promoting green vehicles, he said.

'Mini public transport'

Compared with Geely's yearly rental service in Chengdu, Kandi's green car rental service in Hangzhou offers consumers more options and greater convenience.

Kandi started its experiment in September 2013, providing hourly electric car rental services through multiple service sites, the company told the Global Times Monday via e-mail.

In a bid to make it easier for users to rent and return cars, Kandi built five automated garages that serve as both car "vending machines" and also charging stations, the company said.

At the same time, eight new garages will be put into operation soon and five are under construction, according to the e-mail.

The company has also set up a dispatch center that can accommodate 1,500 electric cars in Hangzhou.

The company also established 48 service sites in the city, including some at premium hotels.

Kandi hopes that with these services sites solving the problems of parking, charging and maintenance, users can experience all the conveniences offered by electric cars and none of the worries.

As of the end of December, Kandi's car rental project had provided 9,850 electric vehicles in Hangzhou.

Like Geely's rental service in Chengdu, Kandi also provides vehicles in two sizes: two-seat cars and four-seat cars, according to the charging list from Kandi.

The hourly rental fee for a two-seat Kandi car is 20 yuan, and 25 yuan for a four-seat car, compared with a Hangzhou taxi's minimum charge of 11 yuan.

In addition to hourly rentals, the company has also offered yearly rental services since May 2014 in a local residential community, and plans to expand the service into other cities soon, including Beijing and Shanghai.

Kandi refers to its rental project as "mini public transport" and expects it to be a new means of public transportation and a solution to China's chronic crowded urban traffic problem.

App backlash

With its growing prosperity, China's demand for automobiles has also surged and made the country the world's biggest auto market in 2009. But increasing vehicle ownership has come with traffic jams and poor air quality.

After Shenzhen in South China's Guangdong Province suddenly started curbing auto purchases on December 29, just one hour before it had formally announced the limit policy, eight cities, including Hangzhou, have implemented similar policies.

Some people have had to resort to public transportation, although it is not easy to take a taxi in megacities such as Beijing and Shanghai, especially during rush hour.

As a result, taxi-hailing apps have been popular in China since 2013 and car service providers soon expanded their business into car-hiring, expecting to attract consumers willing to pay more for a better car.

Uber, a US-based start-up, also joined the Chinese market in February 2014, promoting its car-sharing business model.

But they soon faced a backlash.

Uber has come under fire in Taiwan and Southwest China's Chong-qing in December 2014 over concerns that it and its drivers are not appropriately licensed.

Thousands of taxi drivers in Shenyang, capital of Northeast China's Liaoning Province, held a strike on January 4 to express their discontent over unlicensed vehicles using car-hiring apps.

Beijing's local transportation authority confirmed on Wednesday that car-hiring platforms are forbidden to hire private cars to provide service.

More cities will follow up with crackdowns in the future, Zhao Zhanling, a Beijing-based Internet law expert, told the Global Times on January 4, noting that nascent car-hiring services offered through apps will be affected.

Under these circumstances, car rentals, especially hourly car rental services, which is similar to an upgraded edition of communal bikes, can become a solution for Chinese cities, Gao said.

A fully charged electric car usually has a range of 80 miles, which is enough for urban use, he said, noting that if there are enough charging facilities, electric car rentals will become more popular.