EV-buying alternatives emerge, like free down payments paid back by the mile

In the wake of the coronavirus, overall auto sales in the US could drop to low levels not seen since the 2008 financial crisis. In hard-hit markets, like Seattle, San Francisco, and Los Angeles, the demand for cars already fell by as much as 22%. However, new EV-sales strategies are emerging to help revive the pre-virus momentum for electric vehicles.

In Nottingham, England, an EV-specific leasing company called Drive Electric offers a 30-day ‘try before you buy’ scheme for fleets. It was launched 18 months ago with funding from the Nottingham City Council’s Go Ultra Low funding. Mike Potter, Drive Electric’s managing director, said:

Most organizations need to experience electric vehicles before making a decision to purchase.

The leasing company provides the vehicles, books the loans, and explains how charging works when the car is received. The choice of EVs includes the Hyundai Kona Electric, Kia e-Niro, Renault Kangoo EV, and Nissan e-NV200. A total of 52 organizations have given the program a try, resulting in 20 new EV sales.

Meanwhile, in the Bay Area, Sunil Paul, a pioneer in the ridesharing space, is promoting the idea of a Mileage Purchase Agreement (MPA). Paul put up a $10,000 prize in a contest called “Spring Free EV Contest” in which 16 teams are searching for the best way to implement an MPA to expand EV adoption.

One of the teams is led by entrepreneur Andrew Krulewitz. His start-up Flux-EV.com explains the MPA concept:

An electric vehicle saves you money on fuel and maintenance with every mile you drive. But, these savings only accrue little by little, until now. We loan you up to $5,000 of your future fuel and rebate savings in advance of your purchase. You can use this as your down payment or add it to what you already planned to spend. It’s called a Mileage Purchase Agreement.

You pay us $0.10 per mile for your first 50,000 miles until the Mileage Purchase Agreement (MPA) is paid off. Once it is, all of the additional fuel, maintenance, and interest savings are yours to keep.

Flux-EV is targeted to individual consumers while Texas-based eCarra ­– also participating in the Spring EV contest – is using MPA to finance micro fleets of EVs used in corporate and government rideshare contracts. Royale EV is promoting commercial “delivery fleets as a service,” using EVs with monthly billing via an MPA.

Paul equated the MPA to Power Purchase Agreements that dramatically increased solar adoption in recent years. But he acknowledged that solar and EVs have fundamental differences. That’s why he created a contest called the “Spring Free EV Contest,” so multiple approaches could be put to the test.

About a dozen other teams are trying out different spins on the MPA. The group that gets the most traction by April 2, when the contest judging is planned, will get the $10,000 prize, the potential for more funding, plus mentorship from Paul and other advisors.

Krulewitz believes this is precisely the right time to promote EV-purchasing alternatives, like an MPA, into practice. He said:

When COVID-19 restrictions are lifted, people will resume their daily drives to work. A growing number of these people are super-commuters driving more than 100 miles per day, particularly here in California. If we can get them into a desirable EV, like a Tesla, in a way that saves time and money, it’s a win for them and the environment.