au.news.yahoo.com /the-new-electric-car-trend-which-could-see-demand-soar-like-a-mobile-phone-232622232.html

The new electric car trend which could see demand soar: ‘Like a mobile phone’

Adam Lucius4-5 minutes 7/25/2024

I was talking to a car dealer recently when the conversation turned to electric cars and the poor re-sale value scaring many motorists off. I include myself among those spooked by the prospect of shelling out $60,000 only to learn more than half of it will be wiped the moment you turn left out of the car yard.

Anyway, the dealer was waffling on about things clearly above my intellectual capacity when he said something that stopped me in my tracks.

"Electric vehicles will end up being like your mobile phone," he said.

Hang on. What did he just say?

An electric car will be like my iPhone?

What the hell was he on about?

"You've got a mobile phone plan, haven’t you?" he continued, seeing the confused look on my face.

Yes.

Aussies may soon be treating their EVs like mobile phones. Source: Getty

"Well, every two years you ring Optus or Vodafone or whoever your provider is and they give you a new phone if you sign up for another 24-36 months," he pushed on.

Correct again.

But what's that got to do with buying an EV?

"That's the way it will eventually go with EVs. We live in a subscription world now," he declared.

"Every two years you'll walk in and just swap the car over and pay the subscription."

Surely not?

It all sounded a bit far-fetched and simplistic.

But so did electric can openers until someone showed me the light.

It was time to call in an expert.

• BYD driver's surprising use of EV set to 'revolutionise' common power problem

• Warning against EV owners' 'revolutionary' solution to common battery concern

• The high-risk driving act Australia needs to do something about now

Electric car subscriptions are already 'happening'

James Voortman, CEO of the Australian Automotive Dealer Association (AADA), is across all the latest motoring trends.

I rang him with some trepidation, anticipating a "WTF" response to my mobile phone analogy.

He soon set me straight.

"It is something that is happening," Voortman assured Yahoo News Australia. "In recent years we've seen a couple of companies and manufacturers, and dealer groups, start dipping their toe in the water in terms of subscription and developing product offerings for customers.

James Voortman said the subscription trend should allay the concerns of some potential EV drivers. Source: Supplied

"But it's not an easy business model because of the way vehicles depreciate.

"You really have to structure it in a way that you get the value out of the vehicle."

And that's where GFV — or Guaranteed Future Value — comes into play.

Manufacturers and dealers will guarantee you a certain value on your car at the end of the lease/subscription period.

Again, a bit like your phone, you shouldn’t be greatly out of pocket when it comes time for an upgrade.

New trend should ease 'concerns' about electric cars

Voortman said that this new trend "may allay the concerns" some people have about buying an EV, primarily that "it won't be worth much in four years' time".

"This way you will know exactly what it'll be worth at the time of purchase," he said.

"The uncertainty (with EVs) is similar to some of the things we saw with hybrid vehicles when they were released 20 years ago.

"There were a lot of people concerned about battery life, price was an issue and they weren't certain the vehicle could be repaired easily.

Many Aussies still have concerns about making the jump to an electric car. Source: Getty

"It took a while for all of those fears to be allayed, and I think that's what we're going through now with electric vehicles.

"It's just a process where customers need the time to get comfortable with the fact that what they're buying is a viable transport solution."

I eventually got my head around electric can openers.

So this EV "swap over plan" might be enough to tempt someone like me.