Key facts
- Europcar UK reported a £43.2 million loss for the financial year 2025.
- The company had a £7 million profit in 2024.
- Europcar UK blamed government tax hikes, including National Insurance contributions, for increased costs.
- Weak demand for car hire also impacted the company's financial performance.
- Volkswagen re-purchased the Europcar group in 2021.
Europcar UK has reported a significant financial downturn, swinging from a £7 million profit in 2024 to a £43.2 million loss in its most recent financial year. The Volkswagen-backed car hire firm attributed this reversal to a combination of increased operational costs, primarily driven by government tax hikes such as National Insurance contributions, and a decline in rental demand. The company warned that rental demand had fallen by as much as five percent, affecting both business and leisure sectors.
Europcar also cited rising fuel prices, exacerbated by the war in Middle East, as a contributing factor to its financial struggles. The company's financial performance contrasts with a study by the British Vehicle Rental and Leasing Association (BVRLA), which indicated strong demand and transactions within the broader hire car industry. The BVRLA report suggested that over-availability of cars was necessitating price reductions to maintain competitiveness, and noted minimal demand for electric vehicles (EVs), which have 10% lower utilization rates and twice the holding costs of petrol and diesel cars.
Despite the broader trend, Europcar reportedly increased its electric fleet by 70 percent year-on-year, with EVs now constituting 13.9 percent of its fleet. Christian Øien, managing director of Europcar mobility group UK, stated the company's mission to remove barriers for motorists choosing environmentally friendly vehicles, noting higher net promoter scores for EVs compared to traditional vehicles.