Highlights

SK rent-a-car provides 4,200 electrical autos to its fleet in 2021

Rental corporations anticipated to soak up greater than 8% of complete inexperienced car gross sales by 2025

Refiners count on gasoline demand to proceed falling however exports seen steady

Rental automobile corporations are anticipated to play a giant half within the South Korean car transport sector’s gas swap from gasoline and diesel to greener vitality, with SK rent-a-car and Lotte Rental absorbing a good portion of the nation’s annual electrical car gross sales, business and market individuals stated Dec 10.

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Lotte Rental purchased 8,000 electrical autos in 2020, which accounted round 4% of South Korea’s complete electrical car gross sales for the yr, an organization official stated. The nation’s greatest rental automobile agency by fleet is predicted to have added round 10,000 electrical and hydrogen-fueled autos in 2021.

South Korea’s second greatest auto rental agency SK rent-a-car stated it purchased round 4,200 electrical autos in 2021 and plans to soak up a a lot larger portion of the nation’s complete inexperienced car gross sales over the approaching years.

SK rent-a-car has issued “inexperienced company bonds” for the primary time early this yr in an effort to safe capital purely for investments in inexperienced and environmentally pleasant autos, the corporate stated in an ESG assertion, and is quickly growing the share of inexperienced autos in its general fleet.

The corporate additionally plans to arrange a rental heart for electrical autos at its Jeju department, which might be the nation’s largest electrical vehicle-themed venue.

South Korea’s main automobile rental corporations mixed are anticipated to guide the auto transport sector’s gas swap by buying greater than 8% of the nation’s complete inexperienced car gross sales by 2025, in response to advertising sources on the main rental corporations and market analysts surveyed by S&P World Platts.

Lengthy-term lease packages are extremely popular in huge cities and the inexperienced autos managed by the most important rental corporations would supply many shoppers with an reasonably priced expertise in electrical and hydrogen-fueled vehicles, in response to car sector analysts at Hanwha Funding & Securities and Kiwoom Securities based mostly in Seoul.

South Korea’s gasoline and diesel demand will inevitably pattern decrease because the share of inexperienced autos is poised to surpass 10% of the whole cars registered within the nation inside the subsequent 3-5 years from present 4.2%, in response to diesel advertising managers at three main South Korean refiners. The nation has a complete 2.436 million autos registered and energetic on the highway, in response to Ministry of Land, Infrastructure and Transport knowledge.

The nation’s second greatest refiner GS Caltex has been collaborating with Lotte Rental because the third quarter of 2020 to supply numerous next-generation charging companies at its gasoline stations. GS Caltex operates some 40 charging stations with 46 speedy chargers.

South Korea consumed 206 million barrels of gasoline and diesel within the first 10 months of the yr, up 3% from 200 million barrels in the identical interval a yr earlier and down 1.9% from 210 million barrels over January-October 2019, newest knowledge from state-run Korea Nationwide Oil Corp confirmed.

Though rising electrical and hydrogen-fueled car gross sales in Asia’s fourth greatest oil client will doubtless result in a gradual decline in home gasoline and diesel consumption over the following decade, main refiners together with SK Innovation and S-Oil indicated that manufacturing of the automotive fuels might not essentially drop sharply on expectations of steady exports, particularly to Southeast Asia, center distillate entrepreneurs on the refiners stated.

“The velocity of vitality transition and gas swap will take longer for much less developed economies and common shoppers in these markets would have much less spending energy for brand new inexperienced fuels,” a center distillate marketer at S-Oil stated. “South Korea will proceed to be a dependable liquid motor gas provider for shoppers throughout Southeast Asia for a minimum of one other decade.”