Highlights

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

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

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

Rental automobile firms 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, trade and market individuals mentioned Dec 10.

Not registered?

Obtain each day e-mail alerts, subscriber notes & personalize your expertise.

Register Now

Lotte Rental purchased 8,000 electrical autos in 2020, which accounted round 4% of South Korea’s whole electrical car gross sales for the 12 months, an organization official mentioned. The nation’s largest rental automobile agency by fleet is predicted to have added round 10,000 electrical and hydrogen-fueled autos in 2021.

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

SK rent-a-car has issued “inexperienced company bonds” for the primary time early this 12 months in an effort to safe capital purely for investments in inexperienced and environmentally pleasant autos, the corporate mentioned in an ESG assertion, and is quickly growing the share of inexperienced autos in its total 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 companies mixed are anticipated to steer the auto transport sector’s gas swap by buying greater than 8% of the nation’s whole inexperienced car gross sales by 2025, in line with advertising sources on the main rental companies and market analysts surveyed by S&P International Platts.

Lengthy-term lease packages are extremely popular in large cities and the inexperienced autos managed by the foremost rental companies would supply many shoppers with an reasonably priced expertise in electrical and hydrogen-fueled automobiles, in line with car sector analysts at Hanwha Funding & Securities and Kiwoom Securities primarily based 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 overall cars registered within the nation throughout the subsequent 3-5 years from present 4.2%, in line with diesel advertising managers at three main South Korean refiners. The nation has a complete 2.436 million autos registered and lively on the street, in line with Ministry of Land, Infrastructure and Transport knowledge.

The nation’s second largest refiner GS Caltex has been collaborating with Lotte Rental because the third quarter of 2020 to offer varied next-generation charging providers at its fuel stations. GS Caltex operates some 40 charging stations with 46 fast chargers.

South Korea consumed 206 million barrels of gasoline and diesel within the first 10 months of the 12 months, up 3% from 200 million barrels in the identical interval a 12 months 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 largest oil client will possible result in a gentle decline in home gasoline and diesel consumption over the subsequent 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 secure exports, particularly to Southeast Asia, center distillate entrepreneurs on the refiners mentioned.

“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 spanking new inexperienced fuels,” a center distillate marketer at S-Oil mentioned. “South Korea will proceed to be a dependable liquid motor gas provider for shoppers throughout Southeast Asia for not less than one other decade.”