One of the advantage of this service is that users can opt for the latest available technology, keeping them abreast of the newest developments in safety and comfort
The average cost of an electric 2W in India is about 15% higher than its ICE equivalent; electric cars are up to twice as expensive. EV chargers are also difficult to access with the same ease as petrol pumps, and repairing a faulty battery is an expensive proposition.
Moreover, EVs and batteries are developing fast. Solid-state batteries have not been launched in India yet but globally they are on the horizon. They promise to double an EV’s driving range and offer superior fire safety. Meanwhile, the constantly evolving need for advanced displays and other electronics on EVs will also force automakers to launch new models and/or revisions to their existing lineups every year or so.
Fig. 1: Solid state batteries will reportedly double EVs’ driving range and are the next big development for e-mobility | Image: Flash Battery
This makes a strong case for customers to experience EVs under a subscription model. A primary advantage with the service is that its users can always opt for the latest available technology, which would keep them abreast of the newest developments in safety and comfort. The concept of subscribing to EVs (or cars, for that matter) is not new to the country but has so far not taken off as the monthly rentals were rather expensive. However, their other value additions are based on the following:
- No upfront cost of purchase: A subscription model allows a customer to start using an EV for as little as Rs. 1,999. That is around 1-2% of the cost of buying one, and the value proposition allows for significant savings on the opportunity cost with the user’s capital. eMaaS (e-mobility as a service) is equally useful for businesses that want to keep their capital available for operational costs and investments, which is exactly what they are able to achieve by subscribing to their EV fleet.
Fig. 2: Ola e2Ws are available under subscription for as little as Rs. 1,999 a month | Image: Medium
- No cost of maintenance or repairs: The parent company takes care of the EV’s maintenance and repair. Some also cover roadside assistance, while the insurance cost is also offered as a part of the service. For customers that drive their EVs on everyday commutes or use them for frequent long distance travels, the chances of costly maintenance grow exponentially, and so having the bills covered by the subscription provider can amount to enormous cost savings.It also spares them the hassle of having to locate service stations on their own, or having to wait for the vehicle to be serviced before it can be used again. The customer can receive a temporary replacement while the subscription company handles the service or repair.
Fig. 3: Maintaining EVs is one of their biggest costs, but a subscription service takes that away for the customer | Image: e2wfleet.co.uk
- On-demand fleet expansion: Subscription models offer the flexibility of scaling up a fleet as and when needed. This is incredibly cost-effective as not only does it eliminate the high upfront purchase and insurance costs, but it allows businesses to trim their fleet down to the most efficient size that will serve its operations. Provided that there are no restrictions to how much the vehicles can be driven, a fleet owner could theoretically optimise their operations by running the EVs 24X7, and only scale up when there is enough demand to justify adding a new vehicle. Conversely, the model allows for downsizing without having to urgently sell the vehicles.
EV subscription services in India
France recently announced that it would launch EVs at a subscription price of €100 per month. But similar services already exist in India and the prediction is that the country will have 10,000 car subscribers by the end of 2023, a percentage of which is bound to spill over into EVs. Some of India’s EV subscription models are:
- Ola Care Subscription: For e2Ws with packages starting from Rs. 1,999 (Ola Care) and Rs. 2,999 (Ola Care+)
- SWYTCHD: Helps setup charging points at a user’s residence if requested; facilitates access to chargers from multiple OEMs, including Tata Power, Ather, Kazam and Bolt
- Quiklyz: Loans out EVs as well as conventional cars
- Revv: Covers all the backend costs and lets the user subscribe for as little as one month
- Tata Nexon: Starting at Rs. 29,500 per month
- Ather: Offers its 450X and 450S e2Ws on a monthly subscription programme
More are likely to be introduced by services such as Zoomcar, and the service is gaining popularity at a time when higher interest rates have driven up the cost of buying a new vehicle. Most of India’s EV subscriptions will come from e2Ws because of the lower cost, but it will still be a welcome addition to the country’s fast growing e-mobility segment.