One year of pandemic hints at core change in vehicle ownership proposition
According to vehicle subscription specialist, Wagonex, enquiries to its website have leapt by around 250% since September 2020, which Iain Robertson suggests may indicate a ‘new normal’ in new car acquisition habits but other factors may also need consideration.
In eight years and nine months’ time, the biggest upset in all of our motoring lives is about to turn its new page. Chatting with contacts across the motor industry, even those already invested in electric vehicles, the majority of them are of the opinion that our government’s intentions are based on shaky ground, not least because the Johnson regime, which has been besmirched by funds misappropriation, a tirade of falsehoods and questionable sharp-end decision-making, is unlikely to retain its own power base beyond a possible second term in office.
It has been intriguing to note the responses from the all-important UK fleet sector that was crying out for electrification prior to the government’s surprise decision to make it happen in 2030, yet in some quarters is now stating that 2030 is too soon. They might be correct, as there is no plan yet announced as to how the transition from 150+ years of internal combustion engineering to all-electric is going to happen. Unless some leeway and structural advice is provided, the shift could be catastrophic.
The nationwide network of publicly accessible chargers is already proving to be inadequate due to faulty hardware, unreliable software (for energy payments), breakdowns and (no surprise) vandalism, resulting in upwards of 50% reduction in service provision in some areas. If anything, it has highlighted the value of the domestic charging scene and Michael Youles, charger consultant to my ‘go to’ wallbox company, SYNC EV, has been particularly outspoken.
“While the safety of domestic wallbox installations has been paramount,” he states, “so too is security. While EV halo-wearing gives the larger white boxes attached to a growing number of property exterior walls some street-cred, they flash like a beacon to mischief-makers. One of the key benefits of the SYNC EV installation is its discretion. Small and black, it can be sited, without a need for additional groundworks, visible wiring and without drawing unwelcome attention. While the demand for domestic chargers continues to grow exponentially, we have found that our customers prefer non-invasion of their privacy.”
The SYNC EV equipment can charge all makes and models of EV, is linked to the end-user’s mobile-phone and provides vital feedback of anything from best-rate energy charges to operational status, with a permanent and secure link to head office for updates and problem-solving. While the demand for domestic chargers is steady, potential EV end-users are information gathering like fury at present and a substantial increase in online traffic has been driven by pandemic confined motorists seeking more flexible options for car usership rather than the traditional forms of ownership.
According to the British Vehicle Rental and Leasing Association, over one billion Pounds was spent on 2,003,109 leased vehicles in 2019. Yet more than 80% of them have scarcely moved during the various ‘lockdown’ periods, which has led those end-users questioning the entire ‘ownership’ proposition stronghold evident in the UK. If EVs become the vehicle-of-choice for urban movements, as long as both dimensions and price become more practicable, with more conventionally fuelled transport for longer treks (thereby overcoming the biggest threat of EV ‘range anxiety’), a new form of ‘funding’, known as Vehicle Subscription, may have legs.
It works in the same familiar way as subscriptions for mobile phones and TV streaming services. The consumer benefits by avoiding big deposit payments and lengthy financial commitments, as they would subscribe to their next car for anything between one and 24 months, allowing greater frequency of change, even that caused by pandemic.
Wagonex states that the whole process can be completed online, with insurance and maintenance included at the click of a mouse, with delivery direct to the end-user’s front door. Although, as Mr Youles highlights, “If that household is going electric, they need to sort out their domestic charger demands ahead of the car delivery and booking an installation appointment with an NIC-EIC qualified installer will be highly important, several days ahead of the vehicle’s arrival.”
Interestingly the most searched for car on wagonex.com is the Tesla Model 3, which at around £67,000 purchase price would still entail quite steep monthly rentals. However, the reported shift towards the subscription model of car non-ownership has been coming for a while and, even prior to ‘lockdown’, research suggested that subscriptions could account for 10% of all new vehicle registrations by 2025.
As Toby Kernon of Wagonex states, “In reality, although the effects of lockdown have accelerated the shift towards car subscriptions. When you consider that 80% of drivers have been spending a national average of £226 per month for the privilege of not driving, it is easy to see why people are making the shift towards more flexible usership packages. We live in an age where simplicity rules and flexibility is key. If we can subscribe to everything from flowers and dog grooming to clothing and wine, then cars become an obvious step on the ladder.”
Needless to say, despite the apparent changes in consumer behaviour, the actual numbers of which remain at a low ebb, Mr Kernon is quick to highlight that vehicle subscription should be seen as an opportunity and not a threat to vehicle manufacturers and their dealers. In fact, the Wagonex proposition will open up potentially a lucrative fresh revenue stream.
Mr Kernon concluded: “We’re seeing lots of trends as more and more motorists discover subscription, from people using it as a way of testing the suitability of an EV to car lovers, who may have wanted to be in the latest model and others who occasionally need a larger vehicle for something like a family camping trip.” The benefits of subscription are certainly viable for consumers and the wider vehicle industry. As we progress, albeit slightly rudderless, towards a new era driven by electricity, the potential for funding alternatives assumes a new level of control that already has surprisingly broad acceptance.