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Electric Vehicle Subscriptions Build on Car Leasing Innovations

Autonomy Tesla's outside of the Broad Museum in Downtown LA.

September 22, 2022

Electric Vehicle Subscriptions Build on Car Leasing Innovations

Leasing first hit the auto market in the 1940s and went on to become a popular way to access vehicles for shorter terms and cheaper prices than buying. The more affordable leasing option opened the car market to people who couldn’t finance a vehicle but could manage cheaper monthly lease payments. By softening prices, leasing also allowed more drivers to get behind the wheel of luxury cars. 

In the 1980s, leasing grew to 20% of the auto market, experiencing a boom as drivers discovered the benefits of leasing, and car culture shifted away from ownership. “The idea was as simple as more car for less money,” said Georg Bauer, co-founder and president of car subscription service Autonomy. Bauer is a decades-long auto industry veteran who played a crucial role in designing the modern vehicle lease.

Before the pandemic, leasing reached an all-time high in popularity. But what if the evolution of financing your car doesn’t end there? If leasing represented a step forward for the auto industry, what comes next

Building on the Lease for Something Even Better

Leasing was, and still is, appealing to anyone who can’t foresee their need for a car 10 years down the line, as lease terms are typically structured over two or three years. But what if the reduced time commitment of leasing could be maximized further for even more flexibility? Why stop at a minimum of two or three years?

“In a lease, you are often stuck for 36 months,” Bauer said of the model he helped create while working for companies such as BMW and Mercedes-Benz. “You can’t get out of an existing lease, or it’s a hassle. Some call it a nightmare. It’s economically not beneficial.” So while a lease offers more flexibility than purchasing a car, it is still somewhat rigid.

Car leasing “was a breakthrough at the time, but not much has happened since then in terms of new financial solutions,” Bauer said — that is, until the car subscription.

Car subscription services first emerged in 2010, with contracts that more closely mirrored platforms such as Netflix and Prime rather than conventional vehicle-financing models. Subscriptions can afford you “the flexibility of a rental at the low monthly cost of a lease,” Bauer said. 

Allowing drivers to have a car on a month-to-month basis provides flexibility and attracts millennial consumers who prioritize access and experience over ownership. Major car manufacturers started taking note, and by 2017, automakers such as Cadillac, Porsche, Volvo, and Ford all launched their own takes on the subscription model.

The recent influx in subscription services perhaps reflects our uncertain world. “When leasing and loans were invented, times were much more predictable than they are today,” Bauer said of the need for a new model. “After the pandemic, a fixed term is no longer adequate. It’s antiquated.”

Certainly, as the past few years have reminded us, predicting your life even one month into the future — never mind three years — can be challenging. Car subscription services let drivers plan for the unexpected with a financial model that frees them to make the choices that make sense for them at any given time. 

“A flexible term with the ability to return the car at any time is the way to go,” Bauer said. “It’s the way of the future. I believe that subscriptions today are what leasing was 40 years ago,” he added. And as one of the architects of leasing, he would know.

Powering Access to a Cleaner Climate with Car Subscriptions

Today, Bauer continues to push the auto market forward with Autonomy, an electric car subscription service offering access to Tesla Model 3s.

Modern in nature, car subscriptions circumvent many pitfalls of standard leasing, including hours spent agonizing at the dealership, confusing contracts, surprise fees, rising interest rates, and long-term debt. With Autonomy, you can sign up on your phone with just a credit card and driver’s license in a 100% paperless process. And you’ll get your Tesla faster than the traditional wait time to buy or lease one, a process that often stretches on for months.

The subscription’s monthly payments are all managed through the app and cover expenses like limited roadside assistance and routine maintenance.

Autonomy deals exclusively in electric vehicles (EVs). While EVs’ higher price tags have given some drivers pause, a subscription’s affordable monthly payments are democratizing the movement to clean energy in the auto industry.

For Bauer, Autonomy is about helping people try out EVs without the fear of locking themselves into a years-long contract. “We see the incredible, radical ramp-up of EVs coming,” he said. “Millions of consumers over the next 30 years are going to get into an EV, and for most of them, it will be their first EV ever.”

New technology can be daunting, but that uncertainty becomes more manageable with a subscription. “Given the fact that it is the first EV for millions, the car subscription is the perfect solution. If there’s something you don’t like after three months, then you can return the car with 28 days’ notice. You’re not stuck in a fixed auto lease or loan for years,” Bauer explained. In this way, EV subscriptions can uniquely pave the way for the auto market from fuel dependency to cleaner energy by easing drivers into the shift.

As Bauer put it, the idea of leasing when it began was “more car for less money” — and the same holds true for EV subscriptions today. But now, “more car” doesn’t just mean a fancier car. It also means a more technologically advanced car, a more environmentally conscious car, and a more time-flexible car. The world is changing, and the auto market is adapting to meet new needs.

Picture of Baylor Knobloch

Baylor Knobloch

Baylor is an experienced storyteller working as a writer and editor for Sharp Pen with a background in journalism and media production. When not crafting tech communications, she writes and edits for online publications In The Know and Humor Darling. Baylor earned her BA at Brown University.

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