Subscriptions are the best way to try an EV before you buy

Wednesday, 22 June 2022

Subscribing to an EV is a great way to experience the electric lifestyle without dropping a huge amount of money.

Shifting to an electric vehicle is a pretty big move, what with the various lifestyle changes as well as the parting of a rather large sum of money. So it’s understandable if you’re a little bit unsure, especially if you’re the type that doesn’t particularly like change. But what if there was a middle ground? Well, good news – there is!

The middle ground is the new concept of vehicle subscription services. It goes against the typical Kiwi thing of ownership obsession, but it’s looking more and more like the future of private transport. It’s already a multi-billion-dollar industry, expected to grow to more than $60 billion by 2030.

Basically, the idea is that you pay a fee every so often in order to use a vehicle, just like Netflix. You don’t legally own it, but you can drive it as much as the agreement allows, usually more than 1000km per month, which is probably close to what you’d normally drive away. It’s like an upgraded car rental scheme.

You also don’t have to deal with coming to terms with depreciation, which is never a painless experience when it comes time to sell your car.

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Sixt is one company that offers electric vehicle subscription services.

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Sixt offers premium EVs like the Polestar 2.

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Snap Subscriptions is the only subscription service here that offers Tesla vehicles, including the Model Y.

There are a few companies in New Zealand offering car subscription services featuring EVs, like Sixt, Turners, and Snap Subscribe, and they cover most available electric vehicles sold in New Zealand.

Sixt offers luxury EVs like the Polestar 2, Mercedes-Benz EQA 250, Audi e-tron SUV and Jaguar I-Pace, while Snap has the Tesla Model 3 and Model Y listed. All three offer the Leaf, which often comes in as the cheapest EV available everywhere.

Jeremy Rooke, general manager of digital strategy at Turners Automotive Group, in charge of Turners' subscription car hire service.

Obviously, the higher-end vehicles will ask a higher price, so Sixt is the more expensive of the three here. Prices start at about $1500 per month (Nissan Leaf), and rising to a maximum of $3650 (Audi e-tron Sportback S), with kilometre allowances of about 1250km.

But you don’t pay for maintenance, wear and tear, WoF/registration or insurance, all of which is included, while you can also add extra kilometres to your monthly allowance. It also pays to mention Sixt’s only range consists of cars from 2019 onwards.

Monthly subscriptions are 30-day contracts that can be optionally extended by another 30 days at a time, up to twelve months. Meanwhile, ‘new’ subscriptions are either 6, 9, or 12 month terms, so less flexibility, but these come with brand-new cars, while the monthly option are “near new.”

“With the rising popularity of subscription services, from Spotify and Netflix to mobility services, car subscriptions are the next big thing,” Dane Fisher, CEO of Sixt New Zealand, told Stuff. “The last two years have changed so much in our lives and it’s become apparent that many people don’t want to be tied down to something that might not suit them in six months or a year”

Snap covers the same stuff as Sixt in the subscription price, and offers 2011-2013 Leafs, which come in as the cheapest, at $449 per month, although Snap says they won’t do more than 100km per charge (which is what you’d get with any Leaf of that age).

It’s the only one of the three here to offer Tesla machinery, in the form of the Model 3 and Model Y, and Snap doesn’t have a kilometre limit on its subscriptions.

Founder and CEO of Snap, Jamie Bennett, said that subscribing can is typically cheaper than outright ownership. “We operate at the scale where we have access to bulk vehicle discounts and lower repairs and maintenance costs (although repairs and maintenance on EVs is typically lower than ICE) that are passed on to the consumer.”

“We have many subscribers who want to test before they purchase, many subscribers work out during these 'trials' that it is easier for them to just continue via a subscription model. We adopt a hassle-free alternative to vehicle ownership. One weekly or monthly cost covers everything you need to remain mobile.”

Meanwhile, Turners only has the second-generation 2019 Leaf on its website, but comes in at a very competitive price. There are caveats though – the ‘Entry’ subscription only asks $343 per week for a Leaf, but limits you to 1000km per month with a 20c/km charge beyond that, and a $1500 damage liability charge hovering in the event of a crash.

You can step up to the Standard and Premium subscriptions, which cost $385/week and $434/week respectively, and up the distance limit to 2000 or 2800km, as well as reduce the damage liability to $1000 or $500. Everything is paid for on a weekly basis, without an option to lock into monthly terms.

Premium members also get two car switches per month instead of just one (the Leaf is the only EV available but there are other combustion-powered models), compared to unlimited swaps from Sixt and Snap, although swapping to a better vehicle will come with a price increase.

Jeremy Rooke, chief digital officer at Turners, agreed that the subscription model is a great way for people to see if an EV is right for them.

“It’s perfect for those wanting to try before they buy, those interested in subscribing on an ongoing basis, or even those just curious and looking to experience an EV for a month.”