Sri Lanka’s car rental industry is experiencing a major transformation as more companies shift towards eco-friendly fleets, responding to growing consumer demand for sustainable travel options.
Leading rental firms such as LankaDrive and Ceylon Rentals have announced plans to expand their electric and hybrid vehicle offerings by up to 40% by the end of the year. Industry insiders say this move could mark a turning point for the sector, which has faced mounting pressure to modernize in the wake of recent environmental policy changes.
“Sri Lankan travelers, especially younger customers, are more conscious about their carbon footprint,” said Ishara Perera, CEO of LankaDrive. “We are investing heavily in electric vehicles (EVs) and plan to install charging stations at all our major hubs by mid-2025.”
Tourism operators are also welcoming the change, noting that eco-conscious tourists are more likely to choose rental companies that offer green options. The Sri Lanka Tourism Development Authority (SLTDA) has hinted at new incentives for rental agencies that prioritize sustainability, including potential tax breaks and marketing support.
However, challenges remain. The high cost of EV imports, limited charging infrastructure outside Colombo, and a lack of standardized regulations could slow the industry’s progress. Despite these hurdles, analysts predict a 15% growth in the car rental sector this year, driven largely by the post-pandemic tourism rebound and a national push towards greener transportation.
“This is just the beginning,” said environmental economist Dr. Anuki Ranatunga. “If companies play their cards right, Sri Lanka could become a leader in eco-friendly travel experiences in South Asia.”
As the industry races to adapt, customers can expect to see more electric sedans, SUVs, and even tuk-tuks available for rent across the island in the coming months.
