Cost and availability barriers to electric vehicles can limit access for rideshare and food-delivery drivers, as well as small-business owners whose fleets might log a small number of miles on the road. But at least one fintech company thinks it has the answer.
Spring Free EV launched EVInstaFleet this week, a less-restrictive financing structure, it says, that will let more drivers rent EVs, and without the typical mileage limitations.
Although falling battery costs and government subsidies pad the sticker difference between EVs and comparable gas-powered cars, and that gap is expected to fall further — especially if Congress passes proposed incentives — getting into a purchased EV can prove more expensive up front.
EVs have a sticker price of 25%-30% higher on average than comparable gasoline vehicles. Eventually, 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.
EVInstaFleet connects drivers with the rentals and secures the financing as one step. This constrasts with most current financing options that can take upwards of six months and require personal guarantees. For a small business, that could mean a second mortgage on a home, taking on debt, or seeking help from family and friends. EVInstaFleet uses a pay-per-mile subscription model, charging customers a base monthly fee plus a fee per mile driven.
Most leases limit the number of miles before additional charges incur, creating challenges for high-mileage drivers in car-sharing, ride-sharing, last-mile delivery, and rental fleet businesses like Turo, Getaround, HyreCar, Uber
Gopuff and Lyft
to find a suitable financing solution.
“EVInstaFleet democratizes access to EVs and opens the door to EV-preneurs growing small businesses using EVs as economic assets,” said 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,” Paul added.
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Paul comes to this market with experience in the rideshare industry. And he’s teamed up with Martin Lagod, an early investor in solar, battery materials and the food supply chain, to make the EV market more equitable, they say.
EVInstaFleet’a launch comes on the heels of a partnership with Cox Automotive, which will source pre-owned cars, and HyreCar, which will help Spring Free EV connect with more EV drivers operating rideshares, carshares, rentals, taxicabs, on-demand deliveries and public works.
There are already signs that the rideshare and rental industries have caught on to a rising preference for EVs among drivers and riders. Uber announced in 2020 it would provide $800 million in support to help “hundreds of thousands of drivers” worldwide transition to EVs by 2025. Lyft’s Flexdrive unit works with select local car dealerships, initially in Seattle, Atlanta and Denver, to rent out vehicles on a weekly or long-term basis. In China, seen as the world’s largest EV market, EVCARD, a Shanghai-based electric car-sharing company, has been operational since 2017.
The Biden administration has said it will put the U.S on track to cut the emissions caused by burning gasoline and other fuels in half by 2030 and down to net zero by 2050, a target in line with much of the world’s biggest nations. Biden and the private sector are ramping up charging infrastructure and more EV models are coming to market all the time.
Market tracker LMC Automotive expects EVs to make up 34.2% of new U.S. vehicle sales by 2030. EVs, including plug-in hybrids, were only about 4% of total U.S. vehicle sales in 2021. Still, that marked a doubling from just a year earlier.