California Startup Sells 'Subscriptions' to Electric Vehicles
In January a California startup named Autonomy began "stocking up on EVs from pretty much every company that makes them," reports Bloomberg (including Tesla, Ford, and Polestar). Their plan? Collect a $5,900 "start fee," then charge $490 to $690 a month for an electric vehicle subscription with up to 1,000 miles of driving (but with no maintenance or registration fees):The subscription model has some logic for consumers. In part because of fast-evolving technology, EVs have traditionally shed value much quicker than gas-powered cars. On a depreciation scale, consumers typically lump them in with cell phones.... But EV ownership is also looking better by the day. The depreciation curve is flattening thanks to longer-range machines, and car companies are getting more vocal about things like battery longevity. A three-year-old Chevrolet Bolt, for example, will recoup 84% of its value today, in line with the average resale of all three-year-old cars in North America, according to CarEdge.com, a consumer-facing market research platform. That could be why auto executives are pushing to round up that sweet, sweet software revenue in smaller chunks. BMW, to much outcry, is selling an $18-a-month subscription for heated seats in the UK, and General Motors turned its OnStar voice navigation into a $1,500 "mandatory" subscription on every new Buick, GMC and Cadillac Escalade. Even without a la carte add-ons, one of the major forces propping up prices for used EVs is, ironically, their ability to update remotely - the same technology carmakers are using to nickel-and-dime drivers with subscription services. A contemporary car is nothing if not a dense stack of software, which means subscriptions on wheels are not entirely bonkers. But a car is also an appliance, and consumers aren't accustomed to renting a refrigerator, let alone paying a monthly fee to use the ice-maker. Luckily for Autonomy, the simplest pitch may be the best one. If it can bigfoot individual EV orders by jumping to the head of the queue, the startup could find scads of subscribers - simply because it will have available cars.
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