While automotive incumbents would seemingly have the in-market advantage when it comes to vehicle subscription offerings, energy incumbents have emerged as an unlikely player in the car subscription space by leveraging their expertise in energy infrastructure and EV charging networks to create comprehensive, all-inclusive offerings built around the rise of electric vehicles.
The Business Case for Energy Providers
The business case for energy providers to adopt a car subscription model is strong. By bundling energy and charging products together with an electric vehicle, energy providers can create a comprehensive offering that meets the evolving needs of their customers and expand their revenue opportunity.
Firstly, bundling home electricity with a car subscription is a natural fit, as many customers will likely be charging their electric vehicle at home. By offering a bundled subscription that includes both home electricity and an electric vehicle, energy providers can create a seamless and convenient experience for their customers.
This could include offering special rates or incentives for customers who subscribe to both services, as well as providing easy-to-use tools and interfaces that allow customers to track their energy usage and charging habits.
Secondly, offering a bundled subscription that includes charging infrastructure is another key advantage for energy providers. Electric vehicles require significant charging infrastructure to operate, and energy providers already have the expertise and infrastructure in place to provide this infrastructure.
By offering a bundled subscription that includes charging infrastructure, energy providers can make it easy and convenient for customers to access the charging infrastructure they need, whether it's at home, work, or on the go. This could include providing access to a network of charging stations, as well as offering tools and interfaces that allow customers to find and reserve charging stations as needed.
Finally, offering an electric vehicle as part of the subscription bundle is the third key advantage for energy providers. By providing an electric vehicle as part of the subscription, energy providers can create a comprehensive offering that meets the needs of their customers from end to end. This could include offering a range of different electric vehicles to choose from, as well as providing maintenance and repair services, insurance, and even vehicle swapping services as needed.
Moreover, unlike automakers whose subscription offerings are typically limited to a single brand, energy providers have the opportunity to offer a multi-brand service to customers.
By bundling these three core offerings together, energy providers can create a compelling and comprehensive offering that meets the evolving needs of their customers. This creates a seamless and convenient experience for customers, while also allowing energy providers to capture more value over the entire asset lifecycle of the vehicle.
An Infrastructure Cost Advantage
While automakers may have the vehicle cost advantage, energy providers have the infrastructure cost advantage which could prove more lucrative over the entire asset lifecycle for a vehicle on subscription.
Electric vehicles require significant charging infrastructure to operate, and energy providers already have the expertise and infrastructure in place to provide this. This infrastructure includes not only charging stations, but also the systems and processes needed to manage energy demand and ensure that vehicles are charged efficiently.
While automakers may have a lower cost for the vehicle itself, they may find it challenging to provide the necessary charging infrastructure and related services that are required to make electric vehicle ownership practical and convenient.