Automated Car Wash Boom: How Express Tunnel Car Wash Designs and Technology Are Transforming the Car Wash Industry

Car Wash Industry Overview and the Express Tunnel Car Wash Surge

The U.S. car wash and auto detailing industry generates over $20 billion in annual revenue and is growing steadily. It encompasses a spectrum of service models – from do-it-yourself self-service stalls and in-bay automatic washers to full-service conveyor washes with staff and detailing shops. Express tunnel car wash facilities (conveyor-driven washes focused on quick exterior cleaning) have emerged as a high-growth segment within this market, accounting for roughly 20% of industry revenues as of 2025. In combination with full-service conveyor washes, tunnel-style operations represent over half of all car wash revenues, eclipsing in-bay automatics (~16%), self-service bays (~10%), detailing (~17%), and hand-wash services (~5%). This shift toward express models reflects changing consumer preferences for speed and value. Automated “ride-thru” tunnel washes let drivers remain in their cars for a fast, affordable exterior wash – an appealing alternative to labor-intensive hand washes or time-consuming full-service options.

Consumer behavior has decisively tilted toward professional car washes. Nearly 80% of U.S. drivers now use professional car wash services rather than washing at home, a huge jump from about 48% in 1994. Key factors fueling this trend include rising disposable incomes, busier lifestyles, and the convenience of drive-through express washes. Industry analysts note that car wash services, while discretionary, have become a routine part of vehicle maintenance for many Americans. Even during economic downturns or high gas prices, many consumers continue paying for car washes, preferring the efficiency and results of automated systems. By contrast, lower-income motorists tend to be more price-sensitive – often washing their cars less frequently or doing it themselves – but overall the market’s demand base is broad and growing.

Geographic trends play a significant role in the car wash boom. Heavily populated, car-dependent states with mild climates see the highest concentration of car wash facilities and revenues. California alone accounts for about 15% of U.S. industry revenue (over $3.1 billion annually) with more than 7,500 car wash establishments statewide. Texasrepresents roughly 10% of revenue (~$2.1 billion), followed by Florida at about 5% (~$1.1 billion). Other major markets include New York, New Jersey, Georgia, and Illinois. Sun Belt states tend to support especially robust car wash sales – warm weather and large suburban populations encourage year-round car washing demand. For example, Florida’s climate allows for continuous operation and a steady stream of customers, while California’s high car ownership and affluent, time-pressed consumers create constant demand for convenient wash services. In contrast, rural areas and cold climates see fewer washes per capita. Saturation is increasing in many suburban markets as new express wash developments pop up, but overall opportunities remain in untapped regions given the industry’s historically fragmented nature. Even the largest car wash chains hold only a small fraction of total market share, so there is ample room for new entrants and local operators alongside the expanding regional chains.

Overall, the car wash industry’s post-pandemic recovery has been strong – revenue grew at an estimated 5.8% annual rate from 2020 to 2025, rebounding from COVID-19 impacts. Looking ahead, analysts project steady if moderate growth (~1.5% CAGR through 2030) as the market reaches higher saturation. Crucially, express tunnel car washes are leading the charge in this expansion. Their blend of quick service, competitive pricing, and automation-driven efficiency aligns well with modern consumer expectations, giving them an edge over older formats. In the sections below, we examine how express tunnel designs and technology are transforming site development, operations, and investment dynamics across the industry.

Designing and Developing an Express Tunnel Car Wash Site

Building a successful express tunnel car wash requires a strategic approach to location, layout, and utilities. Investors and developers are finding that careful site planning – often in surprisingly compact footprints – can maximize throughput and profitability for these automated washes.

Location is paramount. An express car wash must be convenient and highly visible to capture impulse visits and repeat business. Being situated on a busy thoroughfare or at a prominent intersection is often a make-or-break factor for volume. High traffic count roads with easy access (ideally a direct right-in/right-out entrance) are preferred, as they funnel a steady flow of potential customers right past the site. Many top-performing washes are located near retail “anchors” that draw consistent crowds – for example, adjacent to grocery stores, gas stations, quick-serve restaurants, or big-box retailers. These neighboring businesses generate errand traffic that can translate into spur-of-the-moment car washes. An ideal site also has sufficient size for vehicle circulation without congestion, while not consuming excessive land. Express tunnel models today can be executed on relatively small parcels (often 0.5 to 1.0 acres), especially compared to old full-service wash facilities that needed space for parking and detailing operations. This more compact footprint is a key innovation of the express model.

Efficient site layout is designed to minimize wait times and keep cars moving smoothly through the wash process. A typical express tunnel site features a one-way flow: vehicles queue up at automated pay stations, proceed onto the conveyorized wash tunnel, then exit to a parking/vacuum area. To avoid cars backing up into the street at busy times, planners aim for stacking space for 15–20 cars in the entrance queue lanes. Multiple pay lanes (often two or three side-by-side kiosks) are common, allowing parallel transaction processing. This reduces bottlenecks at the entry point – customers can use touch-screen kiosks or mobile apps to select and pay for washes quickly (more on this technology below). After payment, merging lanes feed vehicles onto the conveyor belt that pulls them through the wash tunnel. Separate lanes and areas are typically allocated for different functions: dedicated lanes for the pay station, the wash tunnel, and an exit area with free vacuum stations or towels for customer use. By segregating these functions, express washes avoid internal traffic jams and confusion. Clear signage and lane markings guide drivers from entry to exit, reinforcing a smooth experience. In many modern designs, any add-on services (such as express interior cleaning or mat washing) are handled in a pull-off bay or parking area, so they don’t slow the main wash queue. Overall, the automation-driven layout emphasizes a straight-through flow that can serve dozens of cars per hour. Some high-volume sites even incorporate dual wash tunnels or extended conveyors to increase hourly capacity, all within a compact site plan.

Beyond layout, developers must ensure adequate utility infrastructure to support an automated car wash. Water access and drainage are critical: a single express tunnel can use 30–100 gallons of water per car, including reclaim and recycle water. Most new car washes install advanced water reclamation systems that capture and treat wash water for reuse. This dramatically cuts net water consumption and ensures compliance with environmental regulations. For example, some modern express washes recycle 80–90% of their water, needing only about 10–15 gallons of fresh water per vehicle on average. One California-based express chain reports using only ~12 gallons of city water per car by recycling the rest – less than a typical home laundry load. Such systems not only reduce water bills but also help meet local wastewater discharge standards. Developers should plan space for underground water storage tanks, oil-water separators, filters, and pumps as part of the site’s design.

Adequate electrical power is another consideration – high-speed motors, pumps, heaters, and blower dryers can draw a substantial electrical load. Many express tunnels require a three-phase power supply and heavy-duty circuits to run all equipment simultaneously. Installing energy-efficient devices can mitigate operating costs: for instance, variable-frequency drive (VFD) motors and soft-start controllers on pumps optimize energy use by ramping up power only as needed. Some car wash facilities are even adding solar panels or other renewable energy sources to offset electricity usage as part of eco-friendly design initiatives. Additionally, the site must accommodate drainage for runoff and a connection to municipal sewer (or an approved sewer discharge plan) to handle the filtered wastewater. Environmental regulations focus on proper handling of wash chemicals and runoff – many jurisdictions require oil/grit separators and specific permits for car wash wastewater. Fortunately, compliance costs are generally modest relative to revenue, and modern express washes are built to meet these standards from the start.

In terms of construction, developing an express tunnel car wash is a capital-intensive project but with well-understood components. Total project costs range widely based on land and location, but a state-of-the-art tunnel wash typically requires an investment of $2–5 million or more all-in. This budget covers land acquisition, site work, the building itself (often a 100–150 foot tunnel structure), and the specialized equipment. Notably, the conveyor, pumps, sprayers, blowers, and control systems make up a large portion – equipment alone often accounts for 40–60% of total project cost. Construction of the tunnel building and driveways (including any necessary concrete pits and drainage) is the next major cost, followed by expenses for permits, engineering, and contingencies. While up-front costs are high, a well-sited express car wash can generate strong cash flows and asset value. Many developers offset land costs through sale-leaseback arrangements once the wash is built – selling the property to a real estate investor and leasing it back to free up capital. This approach has financed rapid expansion for some chains, though, as we’ll discuss, excessive reliance on debt or sale-leasebacks can introduce financial risk if not managed prudently.

In summary, the modern express tunnel car wash is designed for maximum throughput in minimum space. By picking prime, high-traffic locations and engineering sites for smooth traffic flow, developers can drive substantial volume through a relatively small footprint. Advanced water and power systems are integrated to make the operation both efficient and environmentally compliant. These architectural and site innovations are a cornerstone of the express wash boom – enabling profitable operations and scalable rollout of multiple units. Next, we turn to the technologies inside these facilities that are further transforming efficiency and customer experience.

Technology Transformations in Car Wash Operations

Cutting-edge automation and digital technology are propelling the express car wash revolution. From the machinery that cleans the cars to the payment systems that interact with customers, technology is boosting speed, reducing labor, and improving service quality. Several key tech-driven trends are shaping the industry:

• High Automation & Robotics: Express tunnel car washes leverage sophisticated mechanical systems to do the work that used to require teams of employees. Conveyor belts pull vehicles through a gauntlet of automated washers, soft-touch brushes, soap applicators, high-pressure sprayers, and dryer blowers – all orchestrated by computerized controls. This high level of automation slashes labor needs: an express wash might need only 4–6 staff per shift (mostly to guide vehicles, perform light prep, and handle maintenance), whereas a traditional full-service wash of similar volume would require 8–20 workers. In fact, many conveyor washes now run with just a handful of employees on site, primarily to monitor the equipment and assist customers if needed. Some newer systems even use machine vision and AI sensors to position vehicles and adjust the wash process in real-time, further reducing the need for manual oversight. The result is a labor-light, high-throughput operation – a single automated tunnel can often process 50 to 100+ cars per hour with consistent quality, a productivity level impossible with manual labor alone. This reliability and speed provide a major competitive advantage, especially given rising wages and labor shortages in many markets.

• Digital Payments and Customer Apps: The days of hand-to-hand cash transactions at the car wash are fading. Express washes have widely adopted cashless, digital payment systems to expedite customer throughput and enhance convenience. At the wash entrance, it's now common to find self-service kiosks accepting credit cards, mobile wallets, or RFID-based membership tags. Many sites use license plate recognition (ALPR) cameras or windshield tags to automatically identify subscribers as they pull in, allowing the gate to lift without the driver stopping to pay. For one-time customers, touch-screen kiosks guide them through choosing a wash package and taking payment via card or app tap. This automated point-of-sale approach eliminates the need for a cashier booth and keeps cars moving steadily into the tunnel. Moreover, car wash operators are launching smartphone apps and online accounts that let users manage their unlimited wash subscriptions, find nearby locations, and even queue in a “virtual line.” The digital ecosystem extends to marketing as well – for example, systems can email receipts, track customer visit frequency, and push promotions or loyalty rewards through apps. Embracing digital payments and connectivity not only speeds up transactions but also yields valuable data, allowing operators to personalize offers and optimize pricing. The overall effect is a frictionless, contactless customer experience that meets modern expectations for convenience.

• Touchless and Contactless Systems: In addition to automation, touchless wash technology has gained prominence, especially in the wake of COVID-19. Touchless car washes clean vehicles with high-pressure water jets and chemical detergents without any direct brush contact, appealing to customers concerned about surface scratches or those seeking truly contact-free service. Many express tunnels still use soft-cloth brush components for thorough cleaning, but some incorporate hybrid or optional touchless modes. Stand-alone in-bay automatic washes (where the vehicle remains stationary and a robotic arm moves around it) are often touchless by design. This segment experienced a surge in demand during the pandemic as consumers looked for inexpensive, fully contactless washing methods. In fact, the average price for an in-bay automatic wash is around $10 – a budget-friendly alternative to staffed full-service washes – contributing to its popularity as a substitute or complement to express tunnels. Going forward, touchless systems remain a key part of the industry’s technology mix. Even in staffed express washes, operators have minimized human contact points: customers can stay in their car throughout the process, pay through a machine or app, and let the machines do the work. This not only addressed health safety concerns during the pandemic but also aligns with consumer desire for speedy, hassle-free service.

• Water Recycling and Eco-Efficiency: Car wash technology is also advancing on the environmental front. Eco-efficient systems have become a priority for new car wash installations, driven by both cost concerns and sustainability goals. Modern filtration and recycling equipment enables car washes to reclaim the majority of the water used. For example, many express tunnels now reclaim 50-80% of their water for reuse, and best-in-class operations reach upwards of 85–90% water recycling. This involves capturing the runoff, separating out sediments and oils, treating the water (often with multi-stage filtration and ozone or UV sterilization), and then routing it back into the wash for the initial rinse cycles. Only a small fraction of fresh water is needed to top up losses from evaporation or carry-out. The environmental impact is significant – professional car washes can use far less total water than driveway washing at home, which can easily consume 100+ gallons of fresh water per car. Additionally, express car wash equipment is being engineered for energy efficiency. High-efficiency burners heat water for washing, variable-speed drives optimize the power draw of pumps and blowers, and LED lighting plus smart controls reduce electricity usage during idle times. Some facilities even implement solar water heating or solar panels to offset energy consumption for things like lighting and offices. The use of biodegradable soaps and waxes is another growing practice, driven by both customer preference and local regulations requiring safer chemical runoff. All these tech improvements not only reduce the ecological footprint of car washes but also lower operating costs, directly benefiting the bottom line over time.

• Mobile and On-Demand Services: Technology is enabling car washing beyond the physical confines of a tunnel. An emerging trend is mobile car wash and detailing services that customers can summon via smartphone app – effectively bringing the car wash to the customer. These on-demand services typically use equipped vans or units with water tanks and tools to clean a vehicle on-site at someone’s home or workplace. Some are even waterless (using spray solutions and towels) to avoid runoff issues. The mobile model caters to time-strapped consumers who want convenience, as well as to corporate and commercial clients. Rental car companies, auto dealerships, ride-share fleets, and delivery services are increasingly using mobile wash providers to keep their vehicles clean without taking them out of service for long. Mobile services represent a small but fast-growing niche: they provide flexibility and can penetrate dense urban areas where building a tunnel wash isn’t feasible. However, they also face challenges – smaller operators may lack the capital and scale to offer mobile service widely, and logistics can be complex. Many large express wash brands view mobile services as a complementary offering rather than a core business. Going forward, we may see innovative partnerships (for example, an express wash chain partnering with a mobile service startup) to cover both in-bay and on-site segments of the market. In any case, mobile and on-demand options underscore how digital platforms and customer experience technology are expanding the reach of the car wash industry beyond the traditional lot and tunnel.

From robotics and AI in the tunnel to apps in customers’ hands, technology is accelerating the transformation of car washing into a modern, efficient, and even eco-friendly service. Importantly, these tech drivers also feed directly into new business models and revenue streams, particularly the rise of subscription programs – which we explore next.

Business Model Innovations and Evolving Consumer Behaviors

The surge of express tunnel car washes has been accompanied by innovative business models that emphasize customer retention and recurring revenue. Chief among these is the widespread adoption of unlimited wash subscription programs. Instead of relying solely on one-off transactions, operators are selling monthly memberships that allow customers to get their car washed as often as they like for a flat fee. These programs have rapidly become the norm across the industry, fundamentally changing how car washes generate revenue and interact with consumers.

Monthly unlimited wash plans have proven to be a win-win for operators and customers alike. For a typical price of around $20–$30 per month (the industry mean is about $25/month for a standard plan), members can visit as frequently as they want – which on average ends up being roughly 2–3 washes per month per member. From the customer’s perspective, the value is clear: even moderately frequent washers save money and enjoy a continuously clean car. From the business perspective, the benefits are even more significant. Subscription income provides a stable, predictable revenue base that smooths out the usual seasonality and weather-related dips in car wash sales. Car wash operators note that these plans bolster usage during slower periods (e.g. winter months or rainy weeks) because members will come in regardless, effectively already having paid. Although unlimited plans mean some heavy users might get a very low per-wash price, the increased volume and loyalty often lead to higher total spending and the opportunity to upsell extra services. According to industry analysis, many car washes have been able to increase their profit margins through subscription plans, even if profit per individual wash is lower, because the steady cash flow raises overall capacity utilization and revenue consistency.

The adoption of membership models is now ubiquitous in the express wash segment. Practically every major chain and many independent washes offer a monthly club. In fact, at leading express chains, subscribers account for the majority of wash transactions. For example, Mister Car Wash, the nation’s largest express wash operator, reports that nearly 74% of its wash sales come from its Unlimited Wash Club members. Similarly, regional chains like Zips Car Wash have built up hundreds of thousands of subscribers, with memberships contributing over two-thirds of their revenue. This recurring revenue model has not only boosted sales but also significantly enhanced business valuations – buyers and investors tend to pay a premium for companies with strong subscription metrics because it indicates loyal customers and dependable cash flow. The focus for operators now is on optimizing these programs: pricing them attractively (e.g. a monthly fee roughly equal to the cost of two single washes), marketing them effectively to convert casual customers into members, and delivering a great experience to reduce churn. Some washes are experimenting with family plans or multi-vehicle discounts, tiered membership levels (basic vs. premium washes), and loyalty point systems layered on top of the monthly plan to further engage customers.

Evolving consumer preferences underpin the success of these new business models. Today’s car owners increasingly prioritize convenience, speed, and value. Express tunnel car washes, with their quick in-and-out format, align perfectly with a culture where time is at a premium. Many consumers also appreciate the contactless, stay-in-your-car experiencethat express washes offer – it feels safer, easier, and more modern than handing keys to a stranger or doing manual labor at a self-service bay. The pandemic reinforced these preferences, accelerating the shift toward drive-through services and digital interactions. Moreover, Americans are keeping their cars cleaner than ever, treating routine washing not just as an indulgence but as necessary upkeep (much like regular oil changes). This is partly driven by the ease of unlimited plans: once you’re paying a flat monthly fee, the mental hurdle to get a car wash is low, so members tend to wash far more often than they would if paying per visit. The result is a cultural normalization of frequent car washing, especially in middle- and higher-income segments. Higher-income households have always been more likely to use professional detailing and full-service washes, but now even budget-conscious drivers find value in a $20/month express plan that keeps their vehicle constantly presentable.

There are also shifts in the types of customers using car wash services. While individual consumers remain the core market (with middle- and high-income households each contributing roughly 28% of industry revenue), commercial and fleet customers have become an important segment. Car rental companies, auto dealerships, ride-share drivers, and delivery fleets regularly purchase wash and detailing services to maintain their vehicles. Many express car wash businesses have tailored fleet programs or priority lanes for these clients, and some subscription packages are being marketed to gig-economy drivers (e.g. Uber, Lyft drivers who need clean cars for ratings). This diversification of the customer base adds another layer of stable demand beyond just retail consumers. Even government and municipal vehicles (police cars, city vehicles, etc.) contribute a small but steady stream of business for local car washes.

Crucially, price sensitivity does still matter in consumer behavior. Not everyone will pay for frequent car washes, especially in tougher economic times. Lower-income consumers (under $50k annual income) represent a smaller share of industry revenue and often wash their vehicles themselves or cut back on professional washes when budgets tighten. The rise of express and in-bay automatics, however, has partially addressed this by offering lower-cost options (a basic express exterior wash can be as cheap as $8–$10). This affordability, combined with the convenience, has made professional car care accessible to a broader swath of the population than the old full-service model (which might charge $20–$30 for a hand wash). As a result, even traditionally frugal consumers are more likely to occasionally opt for a quick express wash, especially during seasonal needs (like clearing winter road salt or spring pollen). Industry-wide, the competitive pricing of express tunnels and the value proposition of unlimited plans have kept demand largely inelastic, meaning usage doesn’t drop off dramatically with minor price increases. Many drivers now consider keeping their car clean as essential, not optional, which bodes well for sustained demand.

In summary, the express tunnel boom isn’t just about washing cars faster – it’s about rethinking the car wash business as a high-retention, service subscription model. The transition to digital, automated operations has enabled this shift, and consumers have embraced it. An investor eyeing this space will note that those operators who cultivate a loyal membership base and adapt to changing customer expectations (for convenience, speed, and safety) are positioned to capture greater lifetime value from each customer. This brings us to the perspective of investors and the financial performance metrics that define a successful car wash venture.

Investment Landscape: Financial Benchmarks and Private Equity Trends

U.S. investors have taken a keen interest in express tunnel car washes, drawn by their strong unit economics and consolidation potential. As the industry rapidly modernizes, it offers a compelling mix of healthy profit margins, scalable models, and real asset backing (land and infrastructure). In this section, we detail the financial benchmarks that investors and developers consider – from typical revenues and costs to return on investment drivers – and examine the current private equity and M&A dynamics reshaping the sector.

Revenue and margin benchmarks: A well-run express tunnel car wash can generate impressive revenue on a single site basis. Top-performing facilities often report average unit volumes in the $1.5–$2.0 million per year range. For instance, Mister Car Wash’s public filings suggest its sites average nearly $2 million annually in net sales, buoyed by high membership utilization. Even smaller market washes commonly hit several hundred thousand dollars in revenue per year with steady traffic. On the cost side, express washes enjoy relatively high profit margins due to automation and the productized nature of the service. Industry-wide, profit margins are around 14–15% of revenue on average, which is above many other service businesses and has been inching upward. The lean labor model and efficient chemical/water usage contribute to this. Large chains with subscription-heavy sales often achieve even better profitability – for example, Mister Car Wash operates at roughly a 30% EBITDA margin at the corporate level, thanks to economies of scale and a high proportion of recurring subscription revenue. It’s not uncommon for mature express wash locations to see 50%+ gross margins on wash services, with labor, chemicals, and utilities tightly controlled.

Cost structure and efficiency: The cost structure of an express car wash breaks down into a few major buckets. Labor (wages) is typically the largest operating expense, but notably lower as a percentage of sales than in full-service models. Automated express washes still require attendants and maintenance staff, but payroll might be on the order of 20–30% of revenue, compared to 40%+ in a labor-intensive hand-wash operation. As mentioned, a single express wash shift might run with 4–6 employees versus a dozen or more at a full-service, significantly cutting wage expenses. Other costs include chemicals and supplies (soaps, wax, water treatments) which are usually modest – bulk purchasing keeps per-car chemical cost low, often just a dollar or two per wash. Utilities (water, electricity, gas) are another key cost; modern reclaim systems and energy-saving equipment have helped keep these expenses manageable even as utility rates fluctuate. Rent or real estate costs can vary widely: some operators own their property (in which case depreciation and opportunity cost of capital apply), while others lease the land/building, making rent a fixed cost. Many expanding chains free up capital by doing sale-leasebacks, effectively turning their real estate into a lease expense. Depreciation on equipment is a significant non-cash cost as well, given the expensive machinery that may need refurbishing every 7–10 years. Still, the overall cost structure of express washes allows for solid operating profits; IBISWorld estimates industry profit margins rose about 1.5 percentage points over the past five years as automation helped restrain labor costs. Additionally, those washes that push memberships and upselling (e.g. premium wash packages, add-on services) tend to see higher average tickets without proportional cost increases, thereby boosting margins further.

Capital investment and ROI: From an investor’s standpoint, express car washes require a hefty initial investment but can yield attractive returns when executed well. As noted earlier, developing a new express tunnel wash can cost on the order of $3–5 million depending on land and construction specifics. However, once operational, a successful site generating say $1 million in revenue at a 30% operating margin would produce around $300k in annual EBITDA. That implies a payback period of roughly 5–7 years on the initial investment, which is quite reasonable in real estate development terms. Many investors target internal rates of return (IRRs) in the high-teens or better for single-site car wash projects. Key ROI drivers include achieving high volume (throughput of vehicles), growing a large subscription base for steady income, and controlling operating costs (especially labor and maintenance). Location selection is critical – a car wash on a high-traffic route with favorable demographics can greatly outperform one in a low-traffic or low-population area. Thus, spending more upfront for a premium site often pays off in higher long-term cash flows. Another driver is upselling and pricing strategy: offering tiered wash packages (basic, premium, ultimate) and extras like tire shine or interior quick clean can lift the average revenue per customer. If an express wash can nudge many customers from an $8 basic wash to a $12 or $15 package, revenue and profit rise markedly without needing more cars. On the cost side, leveraging new technologies (as discussed) to save water and energy, and performing proactive maintenance to minimize downtime, can protect margins. Many operators also improve ROI by opening multiple units and spreading corporate overhead or marketing costs across them – a benefit of franchising and chain models.

Private equity and consolidation trends: Perhaps the most striking development in recent years is the influx of private equity (PE) capital into the car wash industry. What was once a fragmented collection of mom-and-pop businesses has caught the eye of institutional investors who see the potential to roll up local washes into efficient, tech-enabled chains. In fact, the 10 largest car wash chains in the U.S. are now all owned or backed by private equity firms. This has fueled a rapid expansion and consolidation phase. For example, after private investors acquired Mister Car Wash in 2014, the company aggressively grew to over 500 locations in 21 states by 2025, eventually going public via IPO. Similarly, PE-backed platforms have been buying up regional operators: in 2023, Whistle Express (backed by Oaktree Capital) struck a landmark deal to acquire 380 car wash sites from Driven Brands (the Take 5 Car Wash portfolio) for $385 million. Once that deal closes and those sites are rebranded, Whistle will leap to roughly 530 locations across 23 states, becoming the largest express car wash operator by site count. The price paid (about $1.0 million per site) suggests many of those acquired locations were underperforming or in need of upgrades, but it underscores the appetite for scale. Another active player, Tidal Wave Auto Spa (with Golden Gate Capital backing), has focused on ground-up development – growing from about 60 locations in 2020 to 290+ by late 2024 through aggressive new builds. Their strategy of rapid greenfield expansion – 50+ new sites opened in the first nine months of 2023 alone – shows how PE capital is also fueling organic growth, not just acquisitions.

This consolidation wave is starting to reshape the market structure. While the industry remains highly fragmented (even the largest chains still represent only a single-digit percentage of total U.S. locations), the top players are amassing significant footprints. Scale can bring advantages in branding, purchasing, and customer acquisition. Crucially, it also allows implementation of sophisticated management systems and technology across networks of washes – something that independent single-site owners might struggle to afford. Subscription programs, for instance, become more powerful when a member can use dozens of locations under one brand during their travels. For investors, larger platforms create the potential for lucrative exit opportunities, such as selling to an even bigger strategic buyer or launching an IPO (as Mister Car Wash did in 2021).

However, the gold rush has not been without challenges. The pace of acquisitions and leveraged expansion led to record-high valuations and debt loads for some operators, which are now being tested by rising interest rates and operational hiccups. A cautionary tale emerged with Zips Car Wash, a PE-backed chain that grew to 260+ locations in 23 states. Zips built a massive 625,000-member subscription base (about two-thirds of its revenue came from unlimited plans) and roughly $303 million in annual revenue. But in early 2025, Zips filed for Chapter 11 bankruptcy to restructure debt after becoming over-leveraged with about $654 million in debt through rapid expansions and sale-leaseback deals. The company’s cash flows could not keep up with its high fixed obligations, illustrating that even high-margin unit economics can be undermined by excessive financial engineering. Zips’ situation highlights a key risk for investors: while car washes generate solid cash EBITDA, they are not immune to liquidity crunches if expansion is too aggressive or debt-funded. Lenders and PE firms are taking note – prudent capital structure and sustainable growth plans are now a bigger part of the conversation.

Indeed, after several feverish years, the M&A market for car washes showed signs of cooling in 2024. In the first half of 2024, the number of car wash business transactions dropped by roughly 46% compared to the first half of 2023 (and total sites sold were down nearly 40%). This pullback is likely due to a combination of factors: higher interest rates making debt-fueled deals pricier, integration challenges as big chains digest prior acquisitions, and perhaps a bit of saturation in certain regions tempering growth expectations. Notably, deal activity also became more concentrated among a few big buyers – Whistle Express alone accounted for over 40% of all acquired sites in early 2024, as it scooped up the Driven Brands portfolio. This suggests that while consolidation continues, it’s happening via larger platform plays rather than many fragmented small deals. Private equity investors remain interested (car washes still promise high ROI relative to risk in the service sector), but they are being more selective and price-sensitive.

The outlook for investors and developers in the express car wash space remains broadly positive. Car washes have proven to be relatively recession-resilient and capable of maintaining profit even in lean times. The combination of recurring revenue from memberships and low variable costs gives a stable base that many businesses envy. Even if U.S. consumer spending slows, basic wash demand tends to remain steady – people want to keep their cars clean, and an express wash is a small-ticket convenience they often won’t give up. That said, new entrants should be mindful of increasing competition and local market saturation. Prime corners in metro areas may already have multiple washes vying for customers; in such cases, differentiation through superior service, marketing, or alliances (e.g. co-locating with gas or retail) can be key. Barriers to entry in car washing are moderate: while capital requirements are high to build a new tunnel wash, there are few regulatory or technical barriers – thus, a well-funded competitor can always enter a market if they find a good site. This dynamic keeps established players on their toes and ensures that innovation (whether in technology, customer perks, or pricing) continues at a rapid clip.

For U.S.-based investors and developers, express tunnel car washes offer a compelling investment story: a growing, modernizing industry with strong consumer demand, opportunities for consolidation, and the chance to own cash-generating real assets. The hero of this story – the express tunnel – has proven its ability to transform a once sleepy, manual business into a scalable, tech-enabled enterprise. By focusing on strategic site development, embracing automation and eco-friendly practices, and capitalizing on subscription-based loyalty, investors can ride this car wash boom to potentially sparkling returns. As with any boom, success will favor those who combine ambition with due diligence, balancing growth with financial discipline. But if current trends are any indication, the express tunnel car wash revolution is well underway – and it’s cleaning up in more ways than one.

Sources: The insights and data in this report draw from the latest industry research and expert analysis, including the July 2025 IBISWorld “Car Wash & Auto Detailing in the US” report, which provides market size, segmentation, and performance benchmarks. Additional context on site development and operations comes from industry guides such as the BusinessDojo Car Wash Business Plan (2025). Investment and M&A trends were informed by recent financial reports and sector commentary, including coverage of major chains like Mister Car Wash and Whistle/Oaktree’s acquisition of Driven Brands’ sites, as well as case studies like the Zips Car Wash restructuring in 2025. Environmental and technological advancements were referenced from company sustainability disclosures and car wash technology providers. All told, the confluence of these sources paints a detailed picture of an industry in transformation – one that is increasingly automated, investor-backed, and built around the express tunnel car wash as the engine of growth.