What Does the Future of Car Buying Look Like?
Episode 06
This week, I’m continuing my dialogue with guest John Possumato. John is the CEO of DriveItAway, a vehicle subscription platform that’s revolutionizing the way you drive. Whether you’re looking to rent, buy, or simply test out a an EV, DriveItAway puts you in the driver’s seat.
In this episode John and I pick up right where we left off and John shares his approach to car ownership as well as his take on the EV space at large. We also touch on EV users, supporting further mainstream adoption and some of the myths that turn away potential buyers.
Episode Highlights
(0:00) – Introduction
(0:36) – Beginning of the episode
(0:51) – “Why does EV subscriptions work for the OEM”
(3:20) – Some myths around EV subscriptions
(5:01) – The customer experience with subscription-based models
(6:52) – Episode wrap-up
Transcript
Elena: So John, welcome back. You didn’t go too far didn’t go too far.
John: I just had a little chocolate break now I’m ready to go.
Elena: and if you know anything about John, you know John loves chocolate. So this is good. That means that this episode is going to be the best episode right?
John: Absolutely.
Elena: All right so first question and it really the only question on this episode is why does EV subscriptions work for the OEM? We already talked about why it works for the consumer, why it works for the dealership, and this is like the trifecta coming in here. Why does it work for the OEM? Usually in this this Holy Trinity that we’re talking about, one of one of these parties usually is the loser. Why are all three the winner?
John: Well, that’s just it. This is an ecosystem. And like I said before, I see it’s similar to consumer leasing that worked for everybody the consumer, the dealer. And the manufacturer. And so it grew like wildfire to become like 30% of luxury sales before the car crunch. I see subscriptions and subscription to ownership is the exact same thing, right? One of the biggest things to know em has to do with EVs right now is create the mainstream buyer the entry level buyer. No one’s been successful that in the United States today, as I said before Mary Barra quoted that 98% of the EV sales last year were the Luxury and Premium Luxury buyers and 98% went to people that own two other vehicles. Right. So that’s the problem for OEMs. Easy subscriptions are the solution, right? It is a stepping stone to ownership. First off, it’s all digital, right? Consumers like all digital transactions, and the sad fact is, you can’t buy a vehicle today, right without a wedding signature. You can’t do it all digital, but you can’t do a subscription all digital inside an app right to it’s a drive now decide later proposition. Consumer doesn’t have to make a long term financial commitment to try an EV, you know is a big step if the only car in your garage happens to be an electric vehicle. Like we said before, this is the ultimate test drive and for an OEM, they can set the broad terms right for the EV subscription, they can decide, you know, when it’s optimal to sell, they can take back that used car. And you know, there’s a lot of talk at this used car week about what are the true residuals for subscription vehicles. There really haven’t been too many on the market. And there haven’t been all that diverse a selection mix. What is the true kind of residual, right? A subscription allows the OEM to really be able to sell that car when they want to right at the time they want to and in that way you know, be able to control that that used vehicle pricing, what are maybe some myths out there about an EV subscription. And can you talk a little bit more about what are the ways in which you’ve been working you as a thought leader how you are dispelling some of these myths around Evie subscriptions. Well, I wouldn’t say the myths around the view subscriptions, the myths around EVs, right? That whole hesitancy and anxiety of where I’m going to charge when I’m going to charge how difficult it is. Right? That is a major myth. But you can’t really convince someone as much as you can show someone if you get somebody to drive your Eevee vehicle, particularly a mainstream driver that maybe has one car in the garage, and they see that it works for them and they see there really isn’t a problem charging at home. Right and they see there isn’t, you know, kind of battery issues right all of a sudden now. Someone gets used to not paying 50-100 bucks a week and in fuel. You know, someone gets used to the easy drive the immediate pickup and they really are fun to drive. And I think there’s been plenty of studies that have proven that once somebody actually drives an EV 98% of the time they’re sold on it, right? It’s just a matter of getting them to drive so you can break that down and say look, the myths are really around the suitability of EVs and the more people that drive them and take them home at night normal thing the more manufacture will sell. But the easiest way to do that is to start the transaction in a risk free subscription. Right something that’s completely turnkey, very, very easy, and lets you try it before you make any long term commitment.
Elena: Yeah, and also my wheels are always turning around customer experience, right? Because that’s what I do at Teleperformance. I optimize the customer experience. So in this scenario, that customer experience around EV, subscriptions. Subscriptions I imagine is well, I’m going to use a buzzword here is frictionless, right, everybody likes to talk about how technology makes everything frictionless, but talk me through a little bit more on how a subscription mechanism that an OEM could potentially use will help the customer experience right make it so that it’s it’s the Amazon like (again another like really heavily used term here) How you can make it like an Amazon-like experience for the consumer.
John: Absolutely. I’m glad you asked that because everyone talks about a digital purchase, right? But if you wanted to buy a vehicle today as a digital purchase, you would have to go through some steps and you would have to have some documents. FedEx to you and signed and you could get the vehicle delivered to you. Right? But it still is sort of a time consuming process. And of course you have to hit the button and make a long term financial commitment. If you were to get an EV subscription today right now on a program like DriveItAway or some others, right you could do it within five minutes on your phone and have the car delivered to you and you could pay with a credit card and there would be no credit check. There’d be no long term financial equipment at all. Literally you could have the vehicle delivered to the Grand Hyatt that we’re all sitting at it used car week, within 510 minutes by the end of this podcast, you would be in an EV right. Insurance included. Maintenance included right you would be able to drive off from this conference and drive home now there really isn’t anything easier in the car business than something like that.
Elena: Yeah. And I’m just thinking to myself, that’s how we’re all used to transacting – everything is already to that level of digital transformation. So we’re about time to wrap this up.
John: And that means she wants to shut me up again that that’s basically what she’s saying in a nice way.
Elena: No, no, we did three episodes. We’re good. Thank you, John, for your time. I appreciate you on this maiden voyage.
John: Well, thank you as always.