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Vehicle as a Service Market Size By Engine Type (Internal Combustion [IC] Engine, Electric Engine), By Vehicle Type (Passenger Cars, Trucks, Utility Trailers, Motorcycles), By Service Providers (Automotive OEMs, Auto Dealerships, Auto Tech Startups, Car Subscription Software Providers), By End-users (Enterprise Users, Private Users), COVID-19 Impact Analysis, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast, 2022 – 2030

  • Report ID: GMI5365
  • Published Date: Sep 2022
  • Report Format: PDF

Industry Trends

Vehicle as a Service Market size valued at USD 5 billion in 2021 and is expected to grow at more than 20% CAGR from 2022 to 2030. Surging consumer demand for effective alternatives to vehicle ownership will improve the market statistics.
 

The vehicle-as-a-service (VaaS) or automobile as a service model has been attaining significant interest from customers recently. One of the factors driving industry growth is its cost-effectiveness, which allows customers with subscription vehicles to acquire the product with no down payment and pay economical monthly installations. Compared to an owned car, vehicle rental enables users to save up on vehicle registration, daily maintenance, servicing, pollution certificate, taxation, and insurance.
 

Vehicle as a Service Market

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Stringent government regulations regarding emission control are reducing interest in vehicle ownership and encouraging individuals to opt for the vehicle as a service model. Hydrocarbon emissions from vehicles are known to adversely affect natural resources. Thus, governments are focusing on curbing vehicle carbon emission levels, which is slated to further enhance the demand for car rental services in the foreseeable future. The Climate Action Law Bill introduced by the German government in 2021 directed the transport sector to reduce its level of carbon emissions from a CO2 equivalent of 150 million tons in 2020 to 85 million tons of CO2 equivalent by 2030.
 

Lack of robust transportation infrastructure may restrain the industry progression

Inadequate transportation infrastructure in several countries is hampering the vehicle as a service market growth. Owing to the inefficiency of government administrations, malpractices, and inadequate maintenance of physical infrastructure, developing nations such as Afghanistan, Bolivia, Lesotho, and Nepal are facing issues with infrastructure development. This is preventing automotive subscription service providers from launching their vehicle services in these regions, impeding industry expansion. Nonetheless, an upsurge in disposable incomes across developed and emerging countries, coupled with high government emphasis on enhancing the transport sector, is anticipated to advance vehicle rental or leasing uptake in the coming years.
 

Cost-effectiveness of vehicle rental services to stimulate IC engine VaaS market growth

The IC engine segment accounted for around USD 4 billion in 2021 and is speculated to depict remarkable growth through 2030. Since the vehicle rental & leasing process is cost-effective and does not require maintenance & documentation, IC engine-based vehicle rental services are observing an upsurge in demand, which is facilitating segment progress.
 

Launch of subscription services by OEMs to spur automotive OEM segment

Global Vehicle as a Service Market Size By Service Provider

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The automotive OEM segment is poised to witness a massive growth of above 24.5% from 2022 to 2030. Several automotive OEMs, such as JLR, BMW, Audi, and Volvo AB, are offering automotive subscription services in specific geographic locations with high growth potential, thereby fueling the vehicle as a service market growth.
 

Consumer inclination toward leasing personal vehicles to accelerate passenger cars penetration

Germany Vehicle as a Service Market Share By Vehicle Type

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The passenger cars segment is estimated to exhibit a growth rate of around 20.5% between 2022 and 2030. The growing traffic and parking problems in cities due to rising urbanization and soaring instances of road accidents are pushing customer interest toward renting or leasing vehicles instead of purchasing them, which is projected to support vehicle as a service market expansion.
 

Prevalent traffic issues in urban cities to favor private users segment

The private users segment is predicted to showcase nearly 21% gains through 2030. The escalating awareness pertaining to carbon emissions from the increasing number of vehicles, avoiding stresses of maintaining an owned vehicle, and traffic problems in urban areas are foreseen to boost product adoption among private users.
 

Advanced infrastructure and high EV production to aid Europe market

The Europe vehicle as a service market revenue exceeded a valuation of USD 2.5 billion in 2021. The accelerating production of electric vehicles and improving charging infrastructure in the region will create promising opportunities for electric vehicle rental.
 

Impact of COVID-19 on the business outlook

The COVID-19 pandemic caused a drop in sales of service vehicles as a result of stringent lockdowns and restrictions on movement. Many automotive manufacturers halted their operations amid the decline in consumer demand. However, in the post-pandemic scenario, in the rapidly evolving automotive sector, car subscription schemes are gaining traction by digitizing customer experience and providing bundled services to support lucrative cash flows for providers. According to industry experts, about 20-30% of new car that sales in 2025 would be on car subscriptions.
 

Product development strategies to strengthen the industry demand

Some of the key players operating in the vehicle as a service market are Autonomy, BMW AG, Borrow, CarNext, Cluno GmbH, Clutch Technologies, LLC (DriveFlow), Daimler AG, Drover Ltd, FlexDrive, Fresh Car, General Motors, Hertz, Hyundai, OpenRoad, Porsche, Sixt, Tata Motors, Toyota, Volkswagen, Volvo Car Corporation, and ZoomCar. These companies are focusing majorly on the expansion of their vehicle fleet and geographical presence to foster business outlook.
 

This vehicle as a service market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD million from 2018 to 2030, for the following segments:

Market, By Engine type

  • IC engine
  • Electric engine
  • APIs
  • Others

Market, By Service Providers

  • Automotive OEM
  • Auto dealerships
  • Auto tech startups
  • Car subscription software providers

Market, By Vehicle type

  • Passenger cars
  • Trucks
  • Utility trailers
  • Motorcycles

Market, By End-user

  • Enterprise users
  • Private users

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Italy
    • Spain
    • Russia
    • Sweden
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Australia & New Zealand (ANZ)
    • Indonesia
  • Latin America
    • Brazil
    • Mexico
    • Argentina
    • Chile
  • Middle East & Africa
    • Saudi Arabia
    • UAE
    • South Africa
    • Israel

 

Authors: Preeti Wadhwani, Smriti Loomba

Frequently Asked Questions (FAQ) :

The market size of vehicle as a service valued at USD 5 billion in 2021 and is set to progress at a CAGR of more than 20% through 2030, driven by the positive outlook for renting and leasing vehicles.

The passenger cars segment is estimated to exhibit a growth rate of around 20.5% between 2022 and 2030 owing to growing traffic and parking problems in cities due to rising urbanization.

The automotive OEM segment is poised to witness approximately 24.5% gains during 2022 to 2030 as numerous OEMs are offering car subscription services in specific geographic locations with high growth potential.

The Europe car as a service market exceeded a valuation of USD 2.5 billion in 2021 and is projected to grow steadily in the coming years as a result of accelerating production of electric vehicles and improving charging infrastructure in the region.

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Premium Report Details

  • Base Year: 2021
  • Companies covered: 21
  • Tables & Figures: 368
  • Countries covered: 23
  • Pages: 230

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