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Can subscriptions provide a start with electric cars?

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Even though electric cars are in the market but still the path to a complete highway with only EVs seems not so near.

An exclusive interview was conducted by Wirtschafts Woche by Annina Reimann with Ferdinand Dudenhöffer from the Center Automotive Research. The interview highlights the importance of subscriptions to electric cars.

Who is Ferdinand Dudenhöffer? He is a German economist and university lecturer. For the last 2 years, he is associated with private-sector CAR-Center Automotive Research in Duisburg as a Director. He also worked with the University of Duisburg-Essen and the University of St. Gallen in the education sector.

The interview is translated from German language and edited.

Mr. Dudenhöffer, many Germans are thinking about buying an electric car but are unsure whether charging and range will work in everyday life. How can you allay people’s fears?

Ferdinand Dudenhöffer:  With car subscriptions.

Car subscriptions?

Ferdinand Dudenhöffer:  Yes, exactly. Subscriptions have even more advantages for car buyers with electric cars than with combustion engines. This is precisely because of the uncertainty surrounding range, battery life, resale value, and charging.

Because you can simply subscribe to such an e-car for a few months – and then return it. Then you know whether the electric car is something for you. That’s why there’s more interest in car subscriptions for electric cars than for combustion engines.

You could even say that electric cars are spurring on the still relatively new concept of car subscriptions. And there are even providers that only offer e-cars: for example, the Mercedes-EQ Abo platform or Shell Recharge. With Shell, I can even add electricity to the rate.

What are the conditions?

Ferdinand Dudenhöffer:  With subscriptions, you generally lease your car for a shorter period than with traditional financing – rental companies like Sixt or Europcar offer subscriptions for six or twelve months, for example.

In addition, all costs except fuel and electricity are covered by the monthly installment. This includes vehicle tax, insurance, maintenance, and, if necessary, repairs. However, the offers are relatively different. Customers should therefore check the offers.

Where are the pitfalls? And reasons?

Ferdinand Dudenhöffer:  First of all, electric cars are a bit more expensive on a subscription basis compared to gasoline-powered cars – even compared to buying or leasing. You have to be especially careful with offers from some car dealers. Some, and these may well be large dealer groups, are shamelessly exploiting the current car shortage.

At present, fewer vehicles can be built due to a lack of parts such as computer chips. Incidentally, more chips are installed in electric cars than in combustion engines.

So the supply situation for electric cars is tighter than for combustion engines, for example. Some are taking advantage of this. I say: You also have to be fair and not overstretch the bow. Otherwise, the supplier shamelessly exploits the problem of the customer who needs a car.

How do I recognize a good offer?

Ferdinand Dudenhöffer:  You divide the monthly rate by the purchase price of the car. The purchase price is the manufacturer’s list price minus the discount from the dealer.

You can’t go wrong with any monthly installment below a factor of 2.0. A factor of 2.0 means that for 2.0 percent of the purchase price, you can drive the car for a month. All costs except fuel are already included and 15,000 km are covered over the year.

Not a bad offer. An example: the Tesla Model 3 Long Range sedan was last available from Like2Drive for a factor of 1.54 percent. The car is offered at a purchase price of 54,417 euros for a monthly installment of 839 euros. By the way, on our website are always calculated the 20 interesting car subscriptions in each case.

Finally, Mr.Dudenhöffer concluded that the waiting time for e-cars is longer than 9 to 10 weeks compare to 5 to 6 weeks in combustion engine vehicles. He compares the waiting time to nothing as compared to buying an e-car with a wait of 25 to 50 weeks.

Well, do check the flexibility about early return and the monthly payment options to be on the safer side.

In my opinion, the strategy is fantastic. Even in the Asian market especially in the Indian market. However, subscriptions are not an easy catch with installment money, and need to be very careful with a new e-car.

Be aware of fraudsters and scammers and if anything happens to the car then it is the same as with your e-car.

In nutshell, subscriptions are not bad. Something Netflix, Disney+, or prime can teach the other industry to make money.

Source:- wiwo

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