Vehicle Subscription Market Analysis

Type (IC Powered Vehicle, Electric Vehicle)

The IC powered vehicle segment held a significant revenue share of 73.2% in 2024 owing to the long-standing buyer trust in petrol- and diesel-powered cars. Consumers have a deeply established buying behavior centered around IC powered vehicles, trusting in their reliability. The easier access makes it convenient for market players to use them in their inventory while offering vehicle subscription services. The segment’s market share is expected to remain steady globally and grow in emerging markets such as India and Brazil. In October 2021, Volkswagen India announced that Volkswagen Taigun, with a petrol engine, can now be subscribed by customers.

The electric vehicles segment in vehicle subscription market is expanding its revenue share due to the rising popularity of EV globally. The increase in EV popularity also has a direct correlation with the growth of larger vehicle subscription. The Global EV outlook 2024 by International Energy Agency reported 14 million new EV registrations in 2023. The report also indicates a 35% increase per year. Vehicle subscription services are updating their inventories and providing the latest EV models to customers at flexible options. In April 2024, Tesla reduced the cost of its monthly self-driving subscription in the US and Canada improving accessibility.

Subscription Period (1 to 6 months, 6 to 12 months, more than 12 months)

1 to 6 months segment in vehicle subscription market is gaining traction and is expected to hold the largest share in the revenue driven by consumer demands for short-term flexibility and convenience. The largest boost to this segment will be the tourism industry with rising demands for vehicles in a 1 to 6-month period during peak seasons. In June 2023, Free2Move announced that its monthly car subscription service experienced a 200% growth in Spain with 2 out of 3 customers retaining their subscription. The company stated that the demand was three times higher compared to previous year.

The 6 to 12 months segment in rising in revenue share as it is a balanced plan for consumers seeking flexibility and stability. The convenience offered by subscription plans with cost-effective bundled services like maintenance, taxes, and insurance contributes to the growth of this segment. Most players in the market offer 12-month subscription as their starting plan. In July 2024, Maruti Suzuki announced traction in their subscription model in India with customers subscribing the for the minimum 12 months plan. The company estimated the growth at 44% over FY23.

More than 12 months segment is gaining traction amongst users who are frequently changing cities. Subscription plans for more than 12 months offer cost-effective mobility solutions to the traveling workforce who have to shift places after a duration of 2 to 4 years. It ensures that they are driving new vehicles in peak conditions as well as the convenience of pickup and delivery as per their needs. The long-term subscription plans segment is expected to grow amongst the consumer base that wants the benefits of car ownership without the responsibilities of maintenance, insurance management, depreciation, etc.

Our in-depth analysis of the global market includes the following segments: