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Zevvy Makes Electric Cars Affordable For Super-Commuters

Electric cars help lower carbon emissions, but many of those who need them most can’t afford them. Now there is an answer to that dilemma.

There’s something about sitting in traffic that seems to get the creative juices flowing. Elon Musk dreamed up the Hyperloop while stuck in the backseat of a car trying to get to the airport in Los Angeles. Andrew Krulewitz was stuck in traffic trying to commute 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 the most.

According to Canary Media, Zevvy wants to make electric cars accessible to the millions of Americans who commute many miles each day and tens of thousands of miles each year. These workers typically can’t afford a new electric vehicle and can’t lease one because they would blast through the mileage cap. So they end up in the used car market and pay through the nose for gas and maintenance.

The thing is, these are precisely the people who should be driving an electric car. “If you think about maximizing an EV’s impact, financially and environmentally, you want it driven as much as possible,” Krulewitz says.

Put another way, there’s a big difference in avoided carbon emissions from electrifying the personal vehicle of someone who taps on a keyboard at home every day versus someone who drives 60 miles to and from work every day. Similarly, the personal financial savings from reduced fuel and maintenance costs add up the more miles are driven on an electric vehicle.

The Zevvy Electric Car Leasing Plan

Zevvy has created a new type of financing product based on proprietary analytics. Drivers can sign up for a lease with a minimum commitment of six months. The monthly bill combines a fixed fee of several hundred dollars plus a variable fee of ​“only a few cents for every mile they drive.” Here’s the important part — there is no cap on mileage per month. Zevvy calculates the fixed fee to be cheaper than a monthly loan payment and the per-mile fee should result in drivers saving money compared to the cost of gasoline.

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 tech, but it’s enough to bring EVs to 1,000 California commuters in the coming year.

The “Ah Hah!” Moment For Electric Cars

Electric cars Chevy Bolt at Oxbow

Photo by Steve Hanley for CleanTechnica. All rights reserved.

The idea for Zevvy came to Krulewitz thanks to a number of circumstances that coalesced into an “ah hah!” moment. He was working for AAA in its future mobility division and commuting 70 miles a day several times a week. The critical factor is that his employer supplied him with an electric car to drive on business.

“I was always astounded at how many people were sitting in bumper-to-bumper traffic on a secondary highway, day in, day out,” he says. ​“Most of the cars were practical sedans or small SUVs, five to 10 years old.” That got him thinking about the expenses he was avoiding by driving an electric car. “The cost of transportation has just run away from the average person. If you can’t provide an easy way for somebody to make the switch [to electric], I think we’re going to hit a demand wall,” he says.

Three Options For Zevvy Customers

Zevvy makes sure its financing options undercut conventional used car loans. The idea is the customer gets an electric car for a lower monthly payment than the available options for gasoline-powered cars. The beauty part is, the more they drive, the more they save. At the end of the first six months, the driver has three options:

  • Return the car with no questions asked.
  • Renew it on a month-to-month basis for up to 60 months.
  • Purchase the car, with every per-mile payment deducted from the purchase price (Zevvy partners offer loan financing for this).

The model relies on proprietary underwriting techniques that the company developed. Instead of just assessing credit score and income, Zevvy scans for customers who will save money by commuting on battery power. In that sense, it’s like a vehicular version of PosiGen, which finances rooftop solar for people in low- and moderate-income categories by ensuring they’ll save money on their power bills.

Zevvy got its first customer via a $5 ad placed on Craigslist, Krulewitz says. Within a week, the first customer brought in the company’s third customer. Zevvy later rolled out a partnership with Uber to show its lease program in its vehicle marketplace for drivers. If there is anyone who could benefit from Zevvy, it is 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 the new equity investment and loan guarantees from multiple California state entities, the startup will expand to other cities in the Golden State that house concentrations of super-commuters.

Zevvy’s small pool of customers averages 25,000 miles driven in a year. Collectively, they are approaching 1 million miles driven since Zevvy launched last year. The company already has more applications received than it can meet with current resources.

“We are growing at a pretty good clip, but we need to make sure we do it in a way that’s sustainable,” Krulewitz says. If Zevvy shows that a variable mileage lease performs well for customers and for lenders, there’s a massive pool of auto financiers that might want a piece of the action.

The Takeaway

This is such a good idea it’s a wonder nobody thought of it before. While we all are running around like chickens without heads because the price of admission to the EV revolution is beyond the reach of many — especially those who could benefit most from it — some guy sitting in a traffic jam gets a brain wave and sees a way to cut the Gordian knot and make it happen.

This is the stuff from which market disruptions result. Don’t raise the bridge, lower the river by re-imagining a different financing model to unlock the benefits of electric cars not only for individual drivers but for the greater good of society as well. After all, lowering carbon emissions is the point of transitioning to electric cars. Let’s hope this innovative thinking spreads far beyond the Bay Area soon.

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Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."


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