Worried about Cost & Range Anxiety? Try EVs with Startup’s Unique Subscription Model
Bengaluru resident Sameer Arif launched his startup SWYTCHD with a subscription model that lets you choose an electric vehicle of your choice at lower costs, and helps you tackle issues like range and charge anxiety.
The number of electric vehicles (EVs) sold in India has seen a reasonable increase in the past two years. According to data shared by Krishan Pal Gurjar, Minister of State for Heavy Industries in Parliament, a total of 1.19 lakh EVs were sold in 2020, which increased to 3.11 lakh in 2021 and 4.19 lakh in 2022.
But to achieve the government’s target of completely replacing fossil fuel vehicles with electric vehicles by 2030, a lot more needs to be done.
High petrol prices present an ideal environment for the adoption of electric vehicles. However, that is still not the case. High upfront costs, range anxiety, and charge anxiety remain challenges with respect to the adoption of EVs, said Anubhav Kapoor, director of legal affairs at Ford India, to India Business Law Journal.
What can one do to combat high upfront costs? Give EVs on a monthly subscription, of course.
That’s exactly what SWYTCHD is doing. Started by Sameer Arif in January 2022, the company provides electric two-wheelers and four-wheelers on a monthly subscription to customers in Bengaluru.
The 30-year-old worked at Jaguar Land Rover for more than eight years before deciding to start his own company. While working in London, his visits to India as well as its pollution, acted as a wake-up call for the entrepreneur.
“From 2017-2020, I visited India regularly on work trips. At that time, EVs were booming in the UK and other countries. However, that was not the case in India. I remember travelling in Mumbai and how a short distance took a long time. As an asthmatic, I would have to use my inhaler a lot due to the pollution,” Sameer tells The Better India.
Being in the automotive industry, he keenly observed the changes in vehicle adoption in the UK. When subscription models started coming up in the UK and North America, Sameer had his ‘aha!’ moment.
“With inflation, life is getting more expensive. People are definitely not so keen on investing in a depreciating asset. In 2019, I started exploring the subscription models that were coming up. As the large upfront investment remains a big deterrent to people buying electric vehicles, I thought of starting something in India,” says Sameer.
How does it work?
An EV is 30-50% more expensive than your petrol or diesel vehicle, according to Sameer.
“Buying an EV is much more expensive, in terms of upfront cost. Since this remains a major barrier to people switching, we offer an option to drive the same at a fraction of the cost. SWYTCHD makes the process of driving an EV fundamentally easier. All you have to do is choose which vehicle you want and we will deliver it to your doorstep. We just need to see your driving licence and Aadhar card. It’s that simple,” adds the founder.
SWYTCHD provides insurance, service, maintenance, charging refunds, and breakdown support. The monthly subscription for an electric two-wheeler starts at Rs 3,999 per month and goes up to Rs 5,500. A four-wheeler subscription starts at Rs 30,000 per month and goes up to Rs 60,000.
“For many, servicing and maintaining a vehicle is a hassle. We call our customers and schedule service. We pick up and drop the vehicle back after it’s done. Our service is flexible and cost-saving. You don’t have to worry about your monthly EMI. If you are going through a tough time, you can simply choose to end your subscription. Alternatively, if you are doing well and want to upgrade, you can switch vehicles too,” says Sameer.
In the past 11 months, SWYTCHD has deployed 130 electric vehicles on the roads of Bengaluru.
Sameer says that their renewal rate is 95%, and many people are on the waitlist.
“We are getting another 250 vehicles delivered soon. We have no vehicles at our warehouse as everything is on the road. Our main idea is for people to understand and experience how an EV works. Another reason for our renewal rate is that we provide top-of-the-line vehicles and offer every support possible,” adds Sameer.
He started the company by pumping in Rs 1 crore of his own money and is in the process of raising funds. They own some of the vehicles in their fleet and work on lease and finance agreements for the rest.
In cars, they have TATA Tigor EV, Nexon EV, Hyundai Kona and MG ZS EV. They have two-wheelers of Ola, Ather, Revolt, Bounce Infinity and Hero. They plan to add more affordable vehicles from Original Equipment Manufacturers (OEM) soon.
Rohit, a resident who has recently switched to electric vehicles from the company, says, “I have been wanting to buy an EV for a long time, but I just didn’t have that kind of money. With SWYTCHD, I’ve been riding the Ather 450X for the last few months and I’m in love with it. Ather has several charging stations on my usual routes, which has made life easier. I’ve had a great experience both with the vehicle and the company,” says Rohit, a customer.
A convenient way to cut costs
The company also deals with the two other challenges in EV adoption — charge and range anxiety.
“We have come up with charging refunds, to buoy usage of electric vehicles. We basically refund the cost of electricity to the customer based on their usage. For example, if a customer is driving 1,000 km and charges their vehicle four times, the approximate electricity cost would be Rs 720. We are rewarding people for driving an EV. Also, any 5 AMP or 15 AMP socket is a potential charging station,” says Sameer.
Meanwhile, electric vehicle manufacturers and state governments are working towards providing more charging points in major cities. In Delhi, Transport Minister Kailash Gahlot said in August that the government has set a target of having one charging point in a radius of every 3 km.
Also, the maintenance costs of EVs are significantly lower than internal combustion engine (ICE) vehicles.
“There is a misconception that electric vehicles are tougher to maintain. In fact, as they have fewer parts, they need less servicing than your ICE vehicles. There is also no need for an oil change. If used properly, they can last very long,” says Sameer.
The India Business Law Journal report mentions that at a petrol price of Rs 100, a 40 km commute would cost a person Rs 15,000-18,000 in a petrol vehicle. An electric car for the same distance would cost Rs 3,000 per month, an 80% reduction in expenses.
SWYTCHD plans to expand to more cities in South India and have 1,000 more electric vehicles on the road in the next 12 months. Despite their heavy operating costs, Sameer says that they are unit economics positive.
“Our model involves a lot of expenses, as we are responsible for all the operating costs. We also have to spend a lot of money on marketing and buying vehicles. Also, introducing a new ownership model in India is a challenge, but people are coming around. We will be happy as long as more people switch to electric vehicles,” says Sameer.
Edited by Divya Sethu, Images Courtesy: Sameer Arif
Sources
‘Electric dreams’ Published on 25 October 2022 Courtesy India Business Law Journal.
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