There’s something about sitting in traffic that seems to stimulate creativity. Elon Musk imagined the Hyperloop while stuck in the back of a car trying to get to Los Angeles airport. Andrew Krulewitz was stuck in traffic trying to get from San Francisco to the East Bay when he dreamed up Zevvy, a startup that seeks to make used electric cars affordable for those who need them most.
According Canary Islands MediaZevvy wants to do electric car accessible to millions of Americans who travel many miles every day and tens of thousands of miles every year. These workers generally cannot afford a new electric vehicle and cannot rent one because they would exceed the mileage cap. So they end up on the used car market and pay dearly for gas and maintenance.
The fact is that it is precisely the people who should drive an electric car. “If you’re thinking about maximizing the impact of an electric vehicle, financially and environmentally, you want it to be driven as much as possible,” says Krulewitz.
In other words, there is a big difference in the carbon emissions avoided by electrifying the personal vehicle of someone who types on a keyboard at home every day compared to someone who drives 60 miles to work. and come back every day. Likewise, the personal financial savings from reduced fuel and maintenance costs add up the longer one travels an electric vehicle.
The Zevvy Electric Car Rental Plan
Zevvy has created a new kind of financing product based on proprietary analytics. Drivers can subscribe to a rental contract with a minimum commitment of six months. The monthly bill combines a fixed fee of several hundred dollars plus a variable fee of “just a few cents for every mile driven.” Here’s the important part – there’s no mileage cap per month. Zevvy calculates that the fixed rates are cheaper than a monthly loan payment and the per kilometer charge should save drivers money over the cost of gas.
This week, the company raised $5.4 million in seed funding led by MaC Venture Capital. It’s a relatively small funding round at a time of massive investment in climate technology, but it’s enough to bring electric vehicles to 1,000 California commuters over the next year.
The “Ah ha!” Moment for electric cars
The idea for Zevvy came to Krulewitz through a number of circumstances that coalesced into an “ah hah!” moment. He worked for AAA in its future mobility division and drove 70 miles a day several times a week. The critical factor is that his employer provided him with an electric car to get around the company.
“I’ve always been amazed at how many people are sitting in bumper-to-bumper traffic on a side highway day in and day out,” he says. “Most of the cars were practical sedans or small SUVs, between five and 10 years old.” This got him thinking about the expense he was avoiding by driving an electric car. of the average person.If you can’t provide an easy way for someone to make the change [to electric]I think we’re going to hit a wall of demand,” he says.
Three options for Zevvy customers
Zevvy ensures that its financing options reduce conventional used car loans. The idea is that the customer gets an electric car for a lower monthly payment than options available for gasoline-powered cars. The beauty is that the more they drive, the more they save. After the first six months, the driver has three options:
- Return the car no questions asked.
- Renew it on a monthly basis for up to 60 months.
- Buy the car, with each kilometer payment deducted from the purchase price (Zevvy partners offer loan financing for this).
The model is based on proprietary underwriting techniques that the company has developed. Instead of just assessing credit score and income, Zevvy searches for customers who will save money by moving on battery power. In that sense, it’s like a vehicular version of PosiGenwhich funds rooftop solar power for low to middle income people ensuring they will save money on their electricity bills.
Zevvy got its first client via a $5 ad placed on Craigslist, Krulewitz says. Within a week, the first client brought the company’s third client. Zevvy then set up a partnership with Uber to show its rental program in its market of vehicles for drivers. If there’s anyone who could benefit from Zevvy, it’s an Uber or Lyft driver.
Currently, Zevvy only offers the Chevy Bolt and the Tesla Model 3, and its market is limited to the Bay Area. With new capital investment and loan guarantees from several California state entities, the startup will expand to other Golden State cities that are home to concentrations of super commuters.
Zevvy’s small group of customers average 25,000 miles driven in a year. Collectively, they are approaching 1 million miles traveled since Zevvy’s launch last year. The company has already received more applications than it can accommodate with current resources.
“Our growth is pretty good, but we have to make sure we do it in a sustainable way,” says Krulewitz. If Zevvy shows that a variable-mileage lease works well for customers and for lenders, there’s a huge pool of auto financiers who might want a piece of the action.
It’s such a great idea, it’s a wonder no one thought of it before. While we’re all running around like headless chickens because the price of admission to the electric vehicle revolution is out of reach for many – especially those who stand to benefit the most – a guy sitting in a traffic jam has a wave cerebral and sees a way to cut the Gordian knot and get there.
This is what causes market disruptions. Don’t raise the bridge, lower the river by reimagining a different funding model to unlock the benefits of electric cars not just for individual drivers but for the greater good of society. After all, reducing carbon emissions is about to switch to electric cars. Hopefully this innovative thinking spreads far beyond the Bay Area soon.
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