Want a new EV delivered to your house overnight?

New startup Motor handles all the logistics for getting an electric car on a monthly subscription basis.

Motor delivers a Nissan Leaf to a new customer. (Motor)
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If buying an electric vehicle were super easy, more people would do it.

That’s the thesis behind a new startup called Motor. It handles acquisition and delivery of the electric car, registration, insurance, charger installation and maintenance. The driver pays one monthly fee for all of that, for as long as they want the car.

That’s a massive shift from the status quo, where tracking down an EV at a traditional dealership can be onerous, and buying a new Tesla incurs a monthslong wait. And since Motor’s offering is on a month-to-month basis, drivers can try out the EV lifestyle without committing tens of thousands of dollars to it.

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Motor aims to bridge the gap between the number of consumers who say they’re interested in EVs and the number who actually acquire them, said CEO Praveen Kathpal, who incubated the company within the independent power producer AES. A 2020 Consumer Reports survey found that 31 percent of drivers say they’re either committed to or open to getting an EV as their next car. But actual EV purchases that year amounted to less than 2 percent of new light-duty car sales.

Ultimately, these are decisions that are in the hands of household consumers in the U.S.,” he said. But while work is underway to increase the supply of EVs and public chargers, there’s relatively little being done to work on the demand gap.”

Conventional wisdom holds that potential EV owners get scared off by cost, range anxiety and lack of public charging equipment. But there are now several EV models that cost less than the average car sold in the U.S., Kathpal pointed out. And there are plenty of multiple-car households that have off-street parking; they don’t need to rely on EVs for long road trips or depend on public chargers. 

Kathpal spent the last decade building a grid-scale energy storage business within AES, which then spun out as Fluence. That company recently went public via a traditional IPO and now has a multibillion-dollar valuation. Storage technology is reshaping the grid to be more efficient and clean. 

After leaving Fluence, Kathpal wanted a new challenge, and he knew that transportation had become the largest source of greenhouse gas emissions in the U.S. He decided that his next decade-long project would be making it as easy as possible to get an electric vehicle.

Too good to be true?

Motor launched early this year in the Indianapolis market, where it found a friendly partner in the local utility, a fellow subsidiary of AES. The startup has enlisted more than 100 customers so far — enough to raise the city’s new EV registrations by 20 percent in the first three quarters of 2021, Kathpal said.

It’s not just the easiest way to get an EV; it’s the easiest way to get any car in Indianapolis,” Kathpal said. And you’re not locked in.”

One challenge in getting customers on board, then, has been convincing them that it isn’t too good to be true.” 

That was the first thought that occurred to technology consultant Rohit Makhijani when he stumbled on a Motor booth surrounded by electric cars in Monument Circle in downtown Indianapolis. He had recently moved outside of downtown and needed his own car, but he wanted to minimize the environmental impact of car ownership. 

I filled out a form right then and there, and the next day, I had a Tesla,” he said. They delivered the car right outside my doorstep, very hassle-free.”

After the Model 3 delivery, Motor coordinated an inspection of the house’s electrical system, and then installation of a Level 2 charger. That piece of equipment sped up charging time from around 18 hours to more like five hours, Makhijani said. Under Motor’s policy, the charger installation is free as long as the customer subscribes to the service for at least four months. The charger hardware is free to keep after 12 months. 

Motor delivers a Tesla, much faster than if a customer bought from Tesla directly. (Motor)

Situated between utilities and customers

The subscriptions range from $649 per month for a Nissan Leaf to $849 per month for a Tesla Model 3, up to more expensive luxury options. Kathpal said Motor’s rates are comparable to the combined retail prices of all the constituent pieces. 

Makhijani did the math for himself and concluded that the Motor deal was in the ballpark of what he would pay to buy the same Tesla with zero down payment, and it was clearly cheaper than leasing. But you can’t get your hands on a Tesla right away these days, and he needed a car immediately. Motor made it happen.

At this point, you may be wondering how Motor makes money if it simply packages existing products into a bundle without adding a fat margin for itself. That’s where the electric utilities come in.

Utilities have a powerful incentive to help their customers switch from gasoline to electricity for propelling their cars. But sudden, uncoordinated growth in electricity consumption for charging could stress the grid.

One way to address that problem is by signing up new EV customers for programs that encourage them to charge at times when electricity supply is abundant, rather than in moments of scarcity. Motor includes signups for such programs when a customer fills out the initial paperwork.

In Indiana, Motor has signed a contract with AES Indiana (still pending approval by the utility regulator) that will have the utility pay Motor a fixed amount plus performance-based payments pegged to how many EV drivers sign up and how many of them join managed charging programs. Motor sits between drivers on the one hand and utilities on the other, offering something of value to both — and drawing revenue from both. 

AES Indiana had already wanted to get more active in encouraging EV adoption, which it views as a core part of the future of energy,” said Kristina Lund, president of U.S. utilities at AES, in an emailed statement.

Our partnership with Motor has allowed AES Indiana to co-create something that works really well for our customers and ultimately will benefit more around the nation,” Lund noted.

Motor’s growth depends on its ability to strike deals with utilities beyond Indianapolis and the AES corporate family. Work is underway on that, Kathpal said. 

Motor does more than hook people up with electric rides; it brings them into a growing phenomenon of people participating in the electric system through their controllable energy devices and benefiting from that activity.

A lot of complex and wonky work has to happen for all those devices to play a meaningful role in the grid. But customers have little reason to care about the finer points of utility rate design and distribution grid planning. It’s up to Motor to take care of the details so the customer doesn’t have to.

Ideally, getting a new car through Motor should feel like going to Disneyworld, Kathpal said: There’s all this stuff going on behind the scenes, but to the customer it has to be easy and simple and magical.”

Julian Spector is senior reporter at Canary Media.