However you feel about them, electric vehicles are one of the next big things in transportation. With a renewed focus on sustainability and ESG goals, carriers, food delivery platforms and just about any other business with a fleet of vehicles are facing pressure to switch to EVs en masse. The problem? Nobody can afford them.
While EVs can help drivers save on long-term costs like fueling, maintenance and repairs, the upfront costs are often so steep that many companies and individuals are wary of investing in them in the first place. According to an analysis from Consumer Reports, an EV can cost anywhere from 10% to 40% more than a gas-powered counterpart of the same size and segment, with supply chain disruptions and a major chip shortage driving prices higher.
So why don’t companies simply lease them? While that strategy can work for some, that financing model doesn’t apply to the millions of last-mile, car-sharing, ride-sharing and rental fleet drivers who surpass the mileage limitations on most leases. Until now, that is.
Spring is still a month away, but Spring Free EV is skipping the April showers and bringing May flowers to EV fleet-based businesses with the launch of its EVInstaFleet offering. Unlike the traditional leasing model, Spring Free uses a pay-per-mile model that requires no personal credit or guarantees from the driver, helping companies deploy electrified fleets quickly and gain access to a solution that’s quickly taking over the transportation industry.
“EVInstaFleet democratizes access to EVs and opens the door to EV-preneurs growing small businesses using EVs as economic assets,” explained Sunil Paul, CEO and co-founder of Spring Free EV. “Most of our clients are immigrants and people of color who have been underserved by the traditional auto financing models. We’ve designed EVInstaFleet with those people in mind and are dedicated to helping those entrepreneurs grow.”
Paul, who started the now-defunct ridesharing company Sidecar in 2011, co-founded Bay Area-based Spring Free in September alongside veterans of Yahoo and Tesla, as well as Martin Lagod, the managing director of Firelake Capital and an early investor in solar, battery materials and the food supply chain.
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The company’s goal is to reduce CO2 emissions by 1 gigaton by 2030, in line with President Biden’s August executive order mandating that EVs account for half of all vehicle sales by that same year. Already companies like Uber (NYSE: UBER), Lyft (NASDAQ: LYFT) and UPS (NYSE: UPS) have made similar commitments, but Spring Free wants to help more companies do the same.
“EVs have a 25-30% higher sticker price than comparable gasoline vehicles,” the company explained to Modern Shipper in an email. “Despite the higher upfront costs, EV drivers save more on total cost over the car’s lifetime when considering maintenance and repairs, fueling costs and depreciation, according to Consumer Reports. Spring Free EV’s model allows drivers to benefit from all of the above without paying the high upfront cost.”
While a small business looking to leverage EVs typically would need to mortgage a home, take on debt or seek assistance from friends and family to cover the purchase price, Spring Free allows them to roll out an electrified fleet in an instant by minimizing those up-front costs. At the same time, they can still enjoy the long-term benefits of EVs, like reduced fueling costs.
In order to remain lucrative while slashing upfront costs, Spring Free deploys a pay-per-mile model that puts a unique twist on the typical leasing agreement.
“Unlike a traditional lease where drivers are allotted a maximum number of miles they can drive before paying a per-mile penalty, our model offers a minimum number of miles,” the company explained.
The model, a mileage purchasing agreement, effectively rewards fleet owners who drive more. The company charges as little as 10 to 12 cents per mile driven, and the per-mile cost is accompanied by a monthly fee that can be anywhere from $299 for a used Chevrolet Volt to $975 for a new Tesla Model Y.
To apply for financing through EVInstaFleet, businesses can visit Spring Free’s online portal and fill out a few pieces of basic information, excluding things like credit history.
However, affordability is only one piece of the accessibility puzzle. Combined with a supply crunch that’s causing a shortage of vehicles, the rising demand for EVs in car-sharing, ride-sharing, the gig economy, last mile and countless other fleet categories is creating another problem: availability.
Supply chain snarls have slowed the movement of automobiles from factories, which are largely based in China and Southeast Asia, to end users. However, because of a January partnership with Cox Automotive, one of the world’s largest automakers, Spring Free customers won’t need to worry about delays.
Through the agreement, Cox will supply Spring Free with preowned EVs sourced domestically, allowing the company to respond to heightened demand while circumventing the chaotic ocean shipping landscape.
In fact, Spring Free is so confident in its ability to meet demand that it’s creating more of it. The company also entered into a partnership with HyreCar Inc. (NASDAQ: HYRE), a car-sharing platform for rideshare and delivery services, in order to connect with more potential customers in those industries. If the company is to achieve its lofty sustainability targets, it will need all the help it can get.
“Our goal of achieving net-zero emissions by 2050 is one of the biggest challenges we face today. To reach that goal, greater EV adoption is needed. Millions of drivers are interested in buying, but transitioning from gas to electric is price prohibitive for many,” Spring Free emphasized. “Our pay-per-mile model allows auto fleet owners to electrify their fleets without putting personal capital on the line or borrowing from friends or family.”