The ink is barely dry on my last story about Autonomy and it has another big one. The electric vehicle subscription company — the biggest in the USA — has ordered 23,000 electric vehicles from 17 different automakers in order to expand and diversify its subscription fleet. Up till now, it has only offered the Tesla Model 3 and Model Y.
The total value of this massive order list is $1.2 billion. In this quarter, Autonomy’s fleet size is 3,250 vehicles. By the 4th quarter of next year, its fleet size is supposed to grow to 22,790.
With Tesla dominating the US electric vehicle market (often accounting for ~70% of electric vehicle sales in the country in the past several years), getting off the ground with ground with the two most desired electric models was the safe, secure, smart, sensible thing to do. However, with the market maturing, there are more and more compelling, exciting, highly desired electric cars available, and there are more and more “mass market” consumers who are interested in legacy brands more than young Tesla. Of course, Autonomy’s fleet of Tesla vehicles will increase as well. It is still going to make up the large base of Autonomy’s fleet in the 4th quarter of next year, 2023.
“Tesla was certainly the right launch partner for Autonomy given their dominance in the electric vehicle market today,” said Scott Painter, founder and CEO of Autonomy. “With every automaker going all-in on electric and so many exciting new products coming to market in the next 6 to 18 months, we have placed our fleet order and are excited to expand our subscription lineup and make it easier for consumers to make the transition to electric.”
The US electric vehicle market is not huge. Autonomy expects that its orders for 23,000 vehicles will represent approximately 1.2% of all US electric vehicle production through the end of 2023. (Interesting that the total purchase amount is $1.2 billion and that represents 1.2% of US EV production projections for this timeframe.) The orders were “designed to fit into the forecast production envelopes of each automaker.” They were placed through the fleet departments of:
- BMW (OTCMKTS: BMWYY)
- Canoo (NASDAQ: GOEV)
- Fisker (NYSE: FSR)
- Ford (NYSE: F)
- General Motors (NYSE: GM)
- Hyundai (OTCMKTS: HYMTF)
- Kia (KRX: 000270)
- Lucid (NASDAQ: LCID)
- Mercedes–Benz (FRA: MBG)
- Polestar (NASDAQ: PSNYW)
- Rivian (NASDAQ: RIVN)
- Stellantis (NYSE: STLA),
- Subaru (OTCMKTS: FUJHY)
- Tesla (NASDAQ: TSLA)
- Toyota (NYSE: TM)
- Volvo (OTCMKTS: VLVLY)
- Volkswagen (OTCMKTS: VWAPY).
Autonomy did have some key criteria for which EVs to order. The most important selection criteria were:
- MSRP Range: $26,595 to $122,440
- Battery Range: 250 miles minimum (with some exceptions)
- Telematics: Fully connected
- Production Forecasts: Vehicle will be available to purchase before the end of 2023
- Residual Values: Models with highest projected resale values
That last matter is an interesting one. For years, we conducted total cost of ownership (TCO) analyses of electric vehicles compared to their main gas-powered competitors. We found that one of the biggest expected advantages in cost was higher resale values for EVs, especially Teslas. As it turned out in reality (so far), even bullish estimates for EV advantage in resale value were good or conservative estimates. We’ll see what happens in the future, but resale value is such a large component of a TCO analysis that it’s interesting to see not only that Autonomy used this as a critical criterion but that the company shared that information.
The thing that dampens much consumer interest in electric vehicles is higher upfront costs, but everyone who looks into the matter can see that the long-term total cost often favors EVs. Autonomy’s solution is simple: we’ll buy the EVs, take the long-term financial risk, and offer people monthly subscriptions (not long-term leases they’re locked into) in order to lower the cost of entry and the long-term financial commitment for more Americans.
“Electric vehicles cost far more than gas-powered vehicles and most consumers will simply not make the switch to an EV without highly compelling value propositions,” said Painter. “Autonomy subscriptions deliver an easier and more affordable way to get an EV, and this is why we believe that subscriptions will be the predominant contract by which consumers adopt electric vehicles from every automaker.”
No long-term debt. No leasing contract. No large upfront payment. And the freedom to jump from one EV to another as your desires change, as news (good or bad) about certain EVs breaks, as EVs with more range or capability come onto the market, or as the EVs you’ve long been waiting for are finally produced.
The Autonomy news before this big order announcement was that the startup had partnered with AutoNation (NYSE: AN), the USA’s biggest car retailer, in order to get the vehicles it orders spread across the country, prepped for customer delivery, delivered, and also later on maintained and repaired. An interesting new element of that partnership is as follows: “In preparation for order fulfillment, Autonomy has mapped vehicle deliveries to corresponding AutoNation franchise and AutoNation USA locations closest to the automakers’ distribution centers in areas with the largest density of EV registrations.” To read more about the original announcement, see: “AutoNation Gives EV Subscriptions From Autonomy A Boost.”
Note that Autonomy customers can’t jump into a month-to-month subscription right away. They do have to start with a 3-month subscription. But after those 3 months, customers have enormous freedom. I have to say, it’s tempting! I love my Tesla Model 3, but how fun would it be to cycle through a dozen or two dozen different electric vehicles, living with one model for a few months and then hopping to a different one for a taste of something new? It’s appealing. And you don’t have to go to a dealer to do this! You can do it all via an app — available from Google Play or the Apple App Store.
Furthermore, Autonomy notes that once you pick an EV, it could be available within a few weeks, whereas getting a new electric car via loan or lease typically entails a 6-month to 9-month wait right now.
We’ll follow up with more information as we dive into the orders Autonomy placed.
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