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The way Sunil Paul sees it, a segment of the transportation industry is being left out in the cold in the transition to electric vehicles: small- to medium-sized fleets.
If you’re a fleet operator with five to 10 vehicles, for example, you’ve likely outstripped your personal credit but don’t have the scale for private equity. So how do you fund a transition to electric vehicles?
That is the problem Paul is hoping to solve through his startup Spring Free EV, a fintech company "designed to make electric vehicles more affordable," in Paul’s own words.
The company does that by removing what Paul says is the most significant barrier to electric vehicle ownership: price. Although electric vehicles are cheaper to own in the long term, their high sticker price deters many would-be purchasers. So Spring Free EV purchases the vehicles upfront and then offers them up to drivers for a monthly fee based on usage; basically, a subscription.
Spring Free founder and CEO Sunil Paul
"What we do is charge a small fee per mile and use that revenue to offset the capital cost," Paul said.
This model got a significant boost in January through a partnership with Cox Automotive, which promises to supply Spring Free EV with used electric vehicles that can be refurbished and passed on to Spring Free’s clients.
"They help us scale up the demand for vehicles and the supply of vehicles," Paul said.
Right now, Spring Free EV is focused on Paul’s longtime niche of car- and ride-sharing fleets. He has deep roots in the industry as co-founder of Sidecar, a pioneer in the space dominated by Uber and Lyft.
"I recognized that the original goal I had with both car-sharing and ride-sharing, which was to make transportation more efficient, and have that efficiency drive down carbon emissions, that didn’t work," Paul said. (The efficiency, we now know, got eaten up by more consumption.)
The upside, in Paul’s opinion, is the creation of an economy of car-sharing hosts around the world, operating small fleets that are ripe for electrification. "Our beginning is to make it very easy for those small fleets to convert to electric," Paul said.
He sees electric vehicles as a great option for entrepreneurs, primarily because they cost less to operate over the lifetime of the vehicle and could generate a premium in revenue. Paul estimates at least 10,000 such small fleet owners are in the country, all of whom are his potential customers.
And while Spring Free EV has also partnered with Nissan and Tesla to supply new electric vehicles, the relationship with Cox Automotive comes at a time when used EVs — traditionally a hard sell — are getting a lot more attention.
"There is a lot more demand than there is supply right now for [used] EV vehicles," said Eric VanderMaten, senior director of acquisitions and remarketing at Cox Automotive.
There is a lot more demand than there is supply right now for [used] EV vehicles.
VanderMaten’s team of used car buyers is tasked with reviewing the wholesale vehicle inventory and helping clients, such as Spring Free EV, source cars based on price and availability.
VanderMaten said that the intense demand for EVs at the moment is driving prices higher than normal. That trend is not unique to EVs — cars in general are more expensive than ever right now — but it renders EVs even less accessible than they were before.
That makes Spring Free’s pitch — a monthly EV subscription with no upfront cost — even more compelling for fleet owners. "The No. 1 problem is price," Paul said. "We’re aimed at the No. 1 problem. And honestly, there’s not a lot of other [companies] that are focused as intently on that No. 1 problem."
If Spring Free EV is successful, it could allow Paul to push transportation toward a more sustainable future a lot faster than the market would normally allow.
"We are after climate impact as our top priority," Paul said. "We think we can scale up this idea and with resulting impact over the next eight years to have a gigaton scale impact."