One of the core advantages of owning an electric vehicle over a gas-powered one is that, despite the higher upfront cost, charging and maintaining it is typically significantly less expensive.
For Lyft (NASDAQ: LYFT) drivers, it just got even cheaper when the company on Tuesday, announced a new discounted charging program with EVgo Inc. (NASDAQ: EVGO), which operates one of the nation’s largest networks of fast-charging stations for EVs.
The offer will give drivers up to 45% off when they charge at one of EVgo’s more than 850 locations spanning over 30 states.
Starting this week, drivers with Lyft Gold or Platinum status — reward tiers that can be earned by driving during busy hours and maintaining a high driver score — can enroll in the program through the Lyft app. Once enrolled, they will save up to 45% on EVgo’s standard pay-as-you-go charging rate and enjoy waived monthly fees when using the company’s charging stations.
“Electrifying our transportation network is a critical component in fighting climate change,” said Paul Augustine, Lyft’s director of sustainability. “We know many drivers on Lyft want to switch to EVs, which is why we’re focused on addressing the biggest barriers they face in transitioning: upfront costs and access to affordable charging. This expanded partnership with EVgo is an important step in addressing the second barrier and part of a suite of new offerings to support drivers in switching to an EV on Lyft.”
While the upfront costs of EVs are the main culprit behind buyer hesitancy, the importance of affordable charging cannot be understated, particularly when it comes to rideshare drivers. A 2019 study from EVgo found that they can cover up to seven times the mileage of the average EV owner, which can make it necessary to charge multiple times per day.
That’s a major barrier for rideshare drivers looking to switch to EVs because the costs of those sessions can add up. But by slashing charging fees nearly in half, EVgo could help push Lyft’s driver base closer to mass adoption.
“The number of rideshare drivers in the U.S. has climbed above 1 million, with many millions more Americans taking advantage of ridesharing services every day,” said Cathy Zoi, CEO of EVgo. “Accelerating the transition of rideshare vehicles to electric is a critical piece of transportation electrification in this country. Drivers with Lyft are uniquely positioned to benefit from EV use as well as be champions for electrification in the communities they serve.”
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When it comes to fleet electrification, Lyft has been putting its foot on the accelerator. In the company’s 2022 environmental, social and governance report, released in October, it revealed vehicles in its network are about 22% more fuel efficient than the U.S. average.
The company also reiterated its goal of total fleet electrification by 2030, an ambitious target but one that grows more attainable with each new partnership and incentive the company adds.
In addition to cut-rate charging with EVgo, Lyft also offers discounts on home charging software and installation through collaborations with Wallbox and Coil. Working with its partners, the company expects to add a new rental program for drivers next year, with thousands of EVs from Ford, Kia, Hyundai and more available at a low cost.
Lyft this week also rolled out several incentives designed to boost adoption.
For example, drivers in California can earn an extra $150 every week by completing 50 rides in their personal EV, through the end of 2024. Nationwide, drivers can earn up to 7% cashback on public charging when using the Lyft Direct debit card.
Moving forward, Lyft drivers should expect even more perks and incentives aimed at helping them transition to electric. The company has made it clear that sustainability will be a core focus in the coming years, and it will likely need to do even more for drivers in order to reach its 2030 goal.
There are a few things working in both companies’ favor, though, most notably the support of the federal government.
Via the Inflation Reduction Act (IRA), which took effect in August, EV buyers are now eligible for a $7,500 tax credit on vehicles assembled within a designated free trade area that includes the U.S., Canada, Mexico and a few other countries — but none in Asia or Europe. The IRA also included a $40,000 credit for businesses looking to buy electric vans or trucks.
Some states have also taken their own initiative. The California Air Resources Board, for instance, has allocated around $125 million toward its Clean Off-Road Equipment Voucher Incentive Project, which is offering buyers of qualified items as much as $500,000 in funding per vehicle or piece of equipment at the point of sale.
One potential headwind facing the EV industry, however, is that production of lithium — a crucial component in EV batteries — may not be sustainable as demand rises throughout the decade.
Notably, the U.S. only produces about 1% of the world’s lithium. But Australia, which also lies within the IRA’s established free trade area, accounts for nearly 60%. So, if a shortage does occur, EV makers may still be able to offer tax credits to U.S. consumers by tapping into the world’s largest producer of lithium.