The rise of electric vehicles has led to a growing interest in alternative car ownership models such as car subscriptions.
Car subscriptions offer a flexible and cost-effective alternative to traditional vehicle ownership, and the model is particularly well-suited for electric vehicles.
As more car subscription providers offer EV-only fleets, we can expect to see electric vehicles become the dominant segment in the vehicle subscription space.
This trend is driven by the alignment between the car subscription business model and the value proposition of electric vehicles, including reduced upfront costs, flexibility, maintenance and servicing, and environmental considerations.
Benefits of Car Subscription for Electric Fleets
Reduced upfront costs
One of the main barriers to electric vehicle adoption is the higher upfront cost compared to traditional gasoline-powered vehicles.
Car subscriptions can help overcome this barrier by offering lower upfront costs and a predictable monthly payment, making electric vehicles more accessible to a wider range of consumers.
There is a case to be made that electric vehicles will continue to have more in common with the phone in your pocket, rather than their combustion counterparts on the road.
Much like your cell phone, consumers will seek to upgrade to newer models more readily, with vehicle subscription providing access to the latest and greatest technology without the need for a significant upfront investment or wearing the cost of depreciation.
The commonality of electric vehicles with phones has certainly prepared consumers for the concept of battery degradation, but the cost of replacing an electric vehicle battery is substantially higher than that of a smartphone battery.
Electric vehicle batteries are a significant part of the overall cost of the vehicle, and replacing them can be expensive. However, the cost of replacing an electric vehicle battery is gradually decreasing as battery technology improves and becomes more widely adopted.
In addition, car subscription services can help to mitigate the cost of battery replacement by providing access to newer and more advanced electric vehicles with improved battery technology. By upgrading to newer vehicles, consumers can potentially avoid the need for battery replacement altogether or delay it for a longer period of time.
It is also worth noting that many electric vehicle manufacturers offer warranties or guarantees on their batteries, which can provide consumers with additional peace of mind regarding battery longevity and potential replacement costs.
Maintenance and servicing
Electric vehicles require less maintenance than traditional gasoline-powered vehicles, with fewer moving parts and fluids to change.
Car subscription services often include maintenance and servicing, making it easier for customers to maintain their electric vehicles without having to worry about finding specialized technicians.
This is also a benefit for the provider, with less maintenance and expense required over the life of the vehicle while on subscription.