CAR Study on Car Subscriptions & E-Mobility: A Win-Win Situation

Change barriers: Small charging network, range, price

What bothers most people about the possible switch to electric cars is the small public charging network (84%), the range of electric cars (71%), the high price (71%), and the uncertainty about the battery's lifespan (60%). A surprising finding: 75% of respondents – and thus typical car buyers – reported that it is possible for them to install a wallbox either in their own home or while renting a house/apartment. The often-feared, too-small public charging network would therefore only affect "just" 25% of potential electric car buyers. However, what is indispensable for almost everyone is the fast-charging capability (96%) or the corresponding options.

"With the current environmental bonuses, one can expect a further increase in new electric car registrations, as there are both the possibilities for wallbox connections and the fast-charging infrastructure that is being expanded along highways," believe the authors.

Car subscription: Little known, but equally interesting

Among typical car buyers, the usage form of car subscriptions is little known. Almost half of the participants (47%) had not heard of car subscriptions before. Until now, respondents had mainly acquired their vehicle through cash purchase (62%), classic credit financing (27%), or through a leasing contract (11%). To clearly and transparently explain the product "car subscription," two concrete case examples were presented.

Fiat 500 or Mercedes EQA: Two-thirds choose premium

The car buyers were asked to choose between the all-electric Fiat 500e and Mercedes EQA at prices of 22,000 euros and 39,000 euros after the subsidy. The two models were chosen so that all respondents could find themselves within their price budget. Thus, the brand was not important, but the different monthly rates or vehicle prices were. As a result, 66% chose the Mercedes and 34% the Fiat.

Without prior knowledge, one-third prefer the car subscription

When deciding on the usage form, 31% of Mercedes enthusiasts and 29% of Fiat enthusiasts opted for the car subscription without any previous knowledge of the concept. The respective costs of the alternatives were clearly stated. Compared to a similar study conducted 18 months ago, interest in car subscriptions has increased further, according to the authors. At that time, only 21% of respondents had chosen the subscription alternative.

"It is also remarkable that a car subscription beats conventional financing methods such as credit financing and leasing. It is also interesting that 72% of all respondents could imagine a car subscription for the electric car. A usage form that is hardly known so far comes into the so-called 'evoked set', that is, in the closer selection of the respondents with understandable explanation," the authors state.

In the end, car subscriptions are significant for the growth of new electric car registrations. Risks such as battery lifespan, repair costs, long contract bindings, and uncertain resale value are excluded in a car subscription. Therefore, it is not surprising that in our study, 46% said that a car subscription makes it easier to get started with an electric car.

"Customer security needs are also changing: traditional insurance components such as a deductible are moving to the background. Instead, a mobility promise is central for customers," says Christian Gründl, member of the board of ERGO Versicherung AG and responsible for individual business.

What makes a car subscription even more interesting for respondents are mainly service components such as a replacement vehicle (74%), protection against additional payments (70%), and breakdown assistance (68%). When it comes to digital services, online contract extensions or cancellations (69%) and support in case of damage (64%) are at the forefront. The majority of the car owners surveyed prefer personal contact (54%) in sales. Online distribution ranks second (38%) – in contrast to today’s car subscription users.

"In online sales, the digital experience plays a central role in binding customers in the long term," adds Holger Horn, IBM iX Leader DACH.

Different mindset: Subscription users place no value on dealer contact

Besides the attitudes of traditional car users, the attitudes of today’s car subscription users (n=1,181) towards electric cars were surveyed. In contrast to the typical driver, today’s car subscription users are mostly male (84%), but have little experience with electric cars, similar to typical car buyers. 52% of the surveyed car subscription users have never driven an electric car before and can well imagine switching to an electric car (93%).

Due to their previous experiences with car subscriptions, its users are convinced (64%) that a subscription makes the switch to an electric car easier. The current negative views on electric cars are almost identical to the general driver group: the small charging network (84%), the perceived short range of the electric car (71%), high price (71%), long charging times (70%), and uncertainties about battery lifespan (60%). As in the first group, wallbox installations are possible for 75% and fast charging is an absolute "must" (95%).

Online first: Uncomplicated access to the car

Car subscription users appreciate the product due to its simplicity (72%), flexibility (70%), and low cost risk (43%). This group is significantly more online-savvy because of their experience with car subscriptions. For them, the most important sales channel is the online channel (80%). Personal conversations play little role for subscription users (8%). Important are therefore digital services such as fast online contract conclusion (85%), brand diversity (78%), replacement vehicle (79%), and protection against additional payments (72%). A very clear advantage for car subscription users is the preferred form of car subscription, at around 80%. One could almost say, "once a subscriber, always a subscriber," according to the authors. The main reason for subscription users to choose cash purchase in the future is the desire for ownership of the car.

"Car subscription and e-mobility simply fit together. ‘Use instead of own’ is just as much a megatrend as climate protection through emission avoidance. Almost a quarter of our car subscription customers already opt for an electric car, and we expect this share to increase further," concludes Alexander Kaiser, Deputy CEO Fleetpool Group.