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Vehicle Subscription Market

Vehicle Subscription Market: Information by Vehicle Type (IC powered Vehicle, Electric Vehicle), Subscription Type (Single Brand, Multi Brand), and Region — Forecast till 2030

Published At : 16 Aug, 2022
Updated At : 08 Sep, 2022
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Market Snapshot
Base Year:
Study Period:
15.35 %
Fastest Growing Market:
Largest Market:
North America

The global vehicle subscription market size was valued at USD 13.34 billion in 2021. It is expected to reach USD 48.25 billion, growing at a CAGR of 15.35% during the forecast period (2022–2030). A vehicle subscription is a service in which a customer pays a recurring fee to use one or more automobiles. Some vehicle subscriptions include insurance and maintenance in the subscription fee, while others allow the subscriber to switch between vehicles during the subscription period. According to industry commentators, a vehicle subscription is an alternative to purchasing or leasing a vehicle. The difference between a vehicle subscription and purchasing a vehicle is that the subscription service retains vehicle ownership. In contrast, vehicle rental requires the effort of procuring vehicles for specific dates or trips.

In addition, the increase in the penetration of automotive subscription service providers as a result of consumers' high demand for car leasing services and the rise in government regulations to control vehicle emissions significantly impact the expansion of the vehicle subscription market. The increase in population, rapid urbanization, and industrialization are anticipated to stimulate the growth of the vehicle subscription market during the forecast period.

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Market Dynamics

Market Drivers

Affordable and Accessible Vehicles

Due to the affordability and accessibility of vehicles, the vehicle subscription market is expanding rapidly. In addition, the rapid increase in the disposable income of consumers in developing nations is anticipated to propel market growth. For example, Fair Financial Corporation announced the relaunch of its app for offering subscriptions to its used car inventory. In the first quarter of 2022, Fair intends to launch subscriptions for used-car leases offered by third-party vendors, aiming to become a central hub for all automotive retail.

Increased global adoption of the vehicle subscription model due to its cost-effectiveness and ease of user access to vehicles is anticipated to propel the market's expansion. For Example, General Motors announced the development of the "Ultifi" software platform for its automobiles. This new software will enable in-car subscription services, over-the-air (OTA) updates, and "new opportunities to strengthen customer loyalty. The automaker conceptualizes the new software powering everything from the mundane, such as weather apps, to potentially controversial features, such as the use of in-car cameras for facial recognition or to detect children to activate the child locks automatically.

Rapid growth in Disposable Income

Rapid growth in the disposable income of consumers in developing nations is a significant factor in the expansion of the market. In addition, the market is anticipated to grow due to factors like population expansion and rapid urbanization. The benefits of subscription over leasing fuel the market's expansion. In addition, compared to leasing services, subscription services have a longer agreement term.

Market Restraints

Negative Impact of Flexible Vehicle Leasing Models

The development of more adaptable leasing models and improved ride-hailing features made available by service providers, as well as the well-established vehicle leasing, rental, and sharing markets, will have significant adverse effects on the growth of the vehicle subscription market. Lack of equity in the vehicle is the main disadvantage of leasing.

Key Market Opportunities

Technological Advancements

Rapid technological advancements and the shift of customers toward vehicle subscription services, as opposed to car ownership, are anticipated to present enormous growth opportunities for the vehicle subscription market. For example, zoom car, a self-drive car rental company, announced plans to increase the percentage of electric cars in its fleet from 2 to 5 percent to 30 to 35 percent in the future years. The subscription model offers simplicity and adaptability, becoming more appealing to many customer segments. Senior citizens want to avoid the annoyances of car ownership, such as maintenance and insurance, and young professionals seeking to avoid significant outlays and long-term financial commitments help grow the market.


Segmental Analysis

The global vehicle subscription market is segmented by vehicle type, subscription type, subscription period, subscription provider, package, and end-user.

Based on the Vehicle Type, the vehicle subscription market is divided into IC-powered vehicles and electric vehicles.

The IC-powered vehicle segment leads the vehicle subscription market in revenue share and is anticipated to grow substantially during the forecast period. Due to the widespread availability of fuel stations across the globe, IC-powered vehicles can be powered. The electric vehicle segment is anticipated to expand at a CAGR of 27% due to the increased penetration of electric vehicle sales and the momentum toward electric mobility. Moreover, the government's investment in promoting electric vehicles will contribute positively to the growth of the vehicle subscription market.

Based on the Subscription Type, the market is divided into single brand [single brand exchange] and multi-brand.

The multi-brand segment dominates the market and is anticipated to maintain its dominance during the forecasted period. As the multi-brand segment allows the customer to switch between multiple brands, it offers the customer greater flexibility and convenience. Increasing consumer preference for multi-brand vehicle subscription services is expected to drive the segment's growth. However, the single-brand segment is also anticipated to experience substantial growth, as it permits switching between models from the same brand.

Based on the Subscription Period, the market is divided into 1 to 6 months, 6 to 12 months, and more than 12 months. The 1 to 6 months component holds a significant market share and is anticipated to grow during the forecast period. Employers commonly rent vehicles during their vacations which drives the demand for the 1-to-6-month subscription segment.

Based on the Service Provider, the market is segmented into OEM/captives, mobility providers, and technology companies. The mobility provider segment holds the largest market share owing to their early adoption of the vehicle subscription model to offer mobility services. The OEM/captives segment will witness an eye-catching CAGR during the forecast period. A growing number of premium OEMs offering vehicle subscription services is expected to propel the segment growth.

Based on the Package, the market is segmented into budget, standard, and premium. The standard segment is estimated to hold a significant share of the market. This segment is likely to maintain its dominance over the market.

Based on End-User, the market is divided into business and private. The private segment accounted for the largest market share. The growing adoption of vehicle subscription services across developed economies is anticipated to drive the segment growth. However, business class end-users have recently started using car subscription services due to ease of access and minimal commitment to ownership through car subscription services.


Regional Analysis

The global vehicle subscription market analysis is segmented into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

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North America and Europe are expected to dominate the market due to the high disposable incomes and standard of living in these regions. On February 28th, Car Next, a pan-European marketplace for high-quality used cars, announced its collaborates with the leading tech company Proov Station and DEKRA to pilot virtual car inspections using AI technology. By utilizing cutting-edge AI technology and the scanner provided by Proov Station, Car Next will be able to automate the scanning and damage detection portion of the reconditioning process, improving its inspection and remarketing procedures.

Asia-Pacific is anticipated to increase at a CAGR of 28% due to a rapid surge in urbanization, industrialization, and the massive population. The growth of disposable incomes due to industrialization fosters market growth in the Asia Pacific region.


Competitive Analysis of the Global Vehicle Subscription Market

  • Fair Financial Corp.
  • Clutch Technologies
  • LLC
  • CarNext
  • FlexDrive
  • Cluno GmbH
  • DriveMyCar Rentals Pty Ltd
  • BMW AG
  • Daimler AG
  • General Motors
  • Hyundai Motor India
  • Tata Motors
  • Tesla
  • Volkswagen
  • Volvo Car Corporation
  • ZoomCar
  • Cox Automotive
  • Wagonex Limited
  • LeasePlan
  • Drover Limited
  • Lyft Inc.
  • Facedrive Inc.
  • OpenRoad Auto Group
  • Porsche AG
  • Primemover Mobility Technologies Pvt. Ltd.
  • The Hertz Corporation
  • Toyota Motor Corporation


Global Vehicle Subscription Market: Segmentation

By Vehicle Type

  • IC Powered Vehicle
  • Electric Vehicle

By Subscription Type

  • Single Brand (Single Brand Swap)
  • Multiple Brand

By Subscription Period

  • 1 to 6 months
  • 6 to 12 months
  • More than 12 months

By Service Provider

  • OEM/Captives
  • Mobility Providers
  • Technology Companies

By Package

  • Budget
  • Standard
  • Premium

By End-User

  • Business
  • Private

By Regions

  • North America
  • Europe
  • Asia-Pacific
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