ONE of Australia’s leading vehicle subscription services, Carly, has been biding its time on buying electric vehicles but now believes the time is right to buy EVs as part of a budget of what will ultimately be a $10 million purchase.

The company believes it can play a vital role in the transition to electric vehicles by helping buyers to experience EVs in a cost-effective way but early travellers on the pathways to actual EV ownership have been badly burned by the astonishing depreciation experienced by electric vehicles.

As part of its $10 million auto shopping list, Carly has placed orders for 78 cars worth $2.8 million. More than half of them are EVs. 

That proportion is likely to persist or even increase as the company spends the rest of the $10 million budget. 

Given the belting that early adopters are receiving in second hand EV values today, GoAutoNews Premium asked Carly CEO Chris Noone whether such eye-watering depreciation posed a risk to the value of the fleet of Carly-owned vehicles it is assembling for its subscribers.

Asked if he was concerned about the resale value of EVs vs ICE vehicles, Mr Noone said: “We were; and that’s why we held back. But we think that a lot of those resale value issues have now flushed through the system. 

“There are two reasons why we think that. A few years ago electric vehicles were at a certain price. And now those same models, the new versions of those models are much cheaper. So we think a lot of those price reductions have now washed through the system. 

Left to right: Matthew Morrison, general manager (fleet), MG Motor Australia; George Severino, group dealer principal, Alto Group; Jason Wood, general manager, Alto Blacktown MG; Chris Noone, CEO, Carly Car Subscription and Ben Hershman, COO, Carly Car Subscription.

“If you look at say Tesla.  A Model 3 was $90,000 and now you pick them up, new, for around $60,000. So we think a lot of those sorts of manufacturer price reductions are starting to normalise. 

“Some people who got into the market early may have had some resale value issues. That’s why we stood on the sidelines.

“What we have also seen is cars like the MG4 which has a five star ANCAP rating and seven years warranty. They are available for just over $40,000. So that’s where we’ve seen that there’s value in the market. 

“Looking at both the consumer and also the business market, the MG4 is a vehicle that’s starting to hit a price point that is really starting to interest a lot of people.”

Carly has also been sourcing from Hyundai on an “asset-light” basis, the Hyundai Ioniq 5 and the Hyundai Ioniq 6 for its EV fleet.

The latest $2.8 million purchase comes at an average of about $36,000 each. Mr Noone said that Carly was getting fleet discounts.

“I wouldn’t say we’re getting anything more special than anyone else. But at the moment we are aiming for vehicles under $50,000. That’s where our sweet spot is and while EVs are obviously more expensive, we have some cheaper vehicles in the mix as well.

Carly has also ordered medium and large ICE SUVs “to cater for the increasing demand from corporate and government clients including Mazda CX5 and CX8, Hyundai Tucson, Nissan X-Trail and Mitsubishi Outlander”.

The company is not buying second-hand vehicles. It is only buying new. Nor does it buy hybrids.

“The reason for that is we see that subscription is a great opportunity for the transition to electric vehicles. And we think there are a lot of uncertainties about going from ICE to EV or from hybrid to EV. 

“So what we’re doing is supporting the majority of the market which is currently ICE and we’re also bringing in the electric vehicles that allow people to experience what an electric vehicle is like for one, two, three or six months. 

So we have a lot of individuals and corporate clients saying they want to buy an EV but they don’t know about the range, they don’t know about how fast it is to charge, they don’t know if they will like driving it. 

“The only way to answer these questions is to actually go out in one for a few months and you actually get the perfect answer because it’s your personal experience of the new technology. 

“So our focus is on pure EVs because that’s where there’s the most questions and that is the biggest leap in technology and that’s where we think we can play the biggest role in helping the transition to EVs,” Mr Noone said.

He said subscribing to an EV was more appealing than leasing for company buyers.

“Yes, a lease could be cheaper, but if you make a bad decision and lease the wrong model, or you buy the wrong model, you are stuck with that for three or four years. We see subscription as a great way to try EVs. 

“Once you try it for a few months on subscription, then you can make a competent purchase, a well-informed purchase and then lease an EV, armed with the knowledge that it is the right EV model for you and how it’s gonna fit with your workforce and your fleet. 

“Fleet managers across the country manage millions of vehicles. But you bring in the EV, that requires a whole different level of experience that almost needs to be rewritten with EVs. 

“So it’s a pretty confident fleet manager who says: ‘I know what I’m doing, I’m just going to buy EVs and it will be fine. What we’re finding is that some are taking a smarter approach; Let’s try a few different types of EVs.

Let’s try them with different parts of our workforce. Let’s understand what the pros and cons are so that when they do make a big investment, either through purchase or finance or leasing, then they can make a really well informed decision about which vehicles to get into.

Mr Noone said the $10 million purchase program was to support the 108 per cent growth the company reported year-on-year and that “we would expect that type of growth to be continuing”.

He added that Carly was now a pure subscription play.

“We used to have a few different business interests. We were in rental and rideshare rental, peer-to-peer rental and we are now 100 per cent in subscription. We see that subscription is the biggest opportunity that we’re aware of in the market. And that’s why we 100 per cent focused on it now.

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