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Volkswagen launches electric car subscriptions for the commitment-phobic generation

Wednesday, September 22, 2021 by Robinhood Snacks |

The Netflix of cars... What Volkswagen's going for. This month, the car giant launched an electric car subscription service in Germany to accelerate its creatively-named “Business Model 2.0.” Volkswagen's goal: transform from a car manufacturer to a "mobility services provider."

  • For ~$600/month, the "AutoAbo" subscription offers access to 2K+ of VW's all-electric ID models.
  • "Everything but the electricity...” Sounds like a TJ's seasoning. The subscription includes insurance, registration, maintenance, and 500 free miles/month.
  • DTR: VW describes the commitment factor as mid-way between leasing and car sharing.

Flexible like pandemic leggings... A typical car lease locks you in for two years. VW's subscription is flexible, with a three month minimum. This week, VW also showed its commitment to low-commitment mobility by filing an offer to buy European rental car giant Europcar. Europcar's 350K vehicles at airports and train stations could support the expansion of VW's subscription footprint.

  • By 2030, VW says that 20% of its sales could come from newer offerings like subscriptions and car sharing. But it has an iffy track record with past attempts.
  • Flexibility is (car) key: “A growing number of people don’t want to own a vehicle permanently," according to VW.
  • That's why car-sharing companies like Zipcar have seen success in NYC and other hubs — and why Uber and Lyft launched car rental services to complement ride-hailing.
THE TAKEAWAY

The new generation is "low commitment"... That requires high-flexibility biz models. Even pre-pandemic, Millennials were moving more often than previous generations. During the pandemic, people moved from cities to suburbs and Airbnbs, and from offices to "work-from-anywhere" locales. 70% of US companies will continue offering remote or flexible work options. And over a third of Gen Z and Millennial workers are looking for new jobs. When you don't know where you’ll be in two weeks, long-term commitments are daunting. Now, more car manufacturers might adopt flexible subscription models.