“This is not a car, this is different” is how Lynk & Co, a company spawned by Volvo and Geely, is positioning the launch of its 01 plug-in hybrid, a compact SUV built from the ground up to share. The more you share its digital key the less you pay each month, possibly even turning a profit.
It’s a bold experiment that I was able to preview in a test vehicle in Amsterdam, where Lynk & Co is staging its first salvo against a century of car ownership mentality.
Lynk & Co first announced its ambitious approach to car sharing five years ago in its home city of Gothenburg, Sweden, emboldened by studies that say cars sit unused 96 percent of the time. That’s valuable real estate that could otherwise be returned to people. So it’s with some anticipation that I set out for my week with a production 01 PHEV running pre-production sharing software.
Amsterdam was chosen as Lynk & Co’s launch city for a variety of reasons, chief among them is its multi-modal inhabitants’ intimacy with car-sharing services. My Dutch family, for example, has never owned a car, nor do most of my friends. Instead we use fleet sharing services like Greenwheels, Mywheels, or Share Now. Otherwise we use a personal car-sharing service like Snappcar when looking for somethingmoreinteresting to drive. As much as we love our electric bicycles, a car is often needed when an e-scooter, taxi, bus, or train just won’t do.
After a week of testing I’ve come away increasingly optimistic about Lynk & Co’s chances, not only to achieve its revenue goals but also its broader societal goal of making people realize that traditional ideas of car ownership, especially in densely populated cities, are woefully outdated. My optimism is fueled by three things: the company’s early success in attracting members, driving the 01 for a few hundred kilometers, and testing an early beta version of the sharing service.
A PROMISING START
You can buy a Lynk & Co 01 outright for €39,000, but most people are opting for memberships that cost €500 each month. That’s about what you’d pay each month on a four-year lease for a comparable Volvo XC40 which is built upon the same platform as the 01. Only with Lynk & Co you can cancel the agreement at any time. Better yet, you can divide the monthly fee with family and friends, or reduce it further by lending the car out to a general pool of neighbors and tourists at an hourly or daily rate, all of which Lynk & Co will facilitate (more on that later).
Membership includes 1,250km (777 miles) of driving per month with each extra kilometer costing €0.15, and unused kilometers carrying over to the next month. The €500/month fee covers insurance, warranty repairs, roadside assistance, and maintenance by Volvo’s dealer
Cars have been at the heart of American culture for more than a century. Until recently, getting a license and buying a car were considered rites of passage, and the car you chose was widely regarded as an expression of your identity, reflecting your priorities and revealing your status.
All that is now changing. The advent of car sharing, ride-hailing and self-driving vehicles presages a radical transformation in consumer behavior. The future of personal transportation will be determined by technological advances, informed by the needs and desires of the people who use them. Our understanding of who those consumers are and what choices they are likely to make is changing in surprising ways.
Car-loving Boomers Are Headed for Cities
Consider baby boomers, the generation born between 1946 and 1964. They may no longer be the largest generation in the U.S. (their kids, the 19- to 35-year-old millennials, now outnumber them slightly), but boomers are likely to continue playing a major role in shaping the future of the auto industry and the rapidly evolving “sharing economy.”
Given the boomers’ affection for cars, it’s not surprising that adults over 50 bought nearly two-thirds of the new cars sold in the U.S. in 2011, according to an AARP study. Unlike earlier generations, today’s seniors “are refusing to follow their parents’ lead and go quietly into the car-buying night,” according to a 2013 article in Bloomberg News. In fact, nearly 93% of Americans between 60 and 64 had driver’s licenses in 2011, up from only 84% in 1983.
What is surprising is that seniors are participating in the well-documented mass migration to urban centers. Despite the common assumption that millennials will dominate the urban landscape in the coming years, recent studies suggest that boomers are also locating there in droves. “Instead of migrating south en masse to retirement communities in the Sunshine State or the wilds of Arizona,” wrote Realtor.com, “more and more baby boomers — a particularly urban-savvy group of Americans — are moving back to the metro areas they abandoned when they began raising families.”
And these older urbanites are anything but sedentary. Rather than retiring, 87% say a shorter commute to work is a major reason for their move to the city, according to a recent Zipcar study. Moreover, when they are not working, the study said, “An overwhelming 90% are seeking to boost their cultural experiences, with easy access to a variety of restaurants, shops and fitness facilities.”
“Millennials have a lower rate of car ownership than previous generations at their age.” –Sam Abuelsamid, Navigant Research
All this activity makes urban boomers active consumers. “Between 2015 and 2030, the 60-plus age group in the United States, for instance, is projected to contribute 40% or more of consumption growth in categories such as personal care, housing, transportation, entertainment, and food and alcoholic beverages,” reported a 2016 study by the McKinsey Global Institute titled “Urban World: The Global Consumers to Watch.”
For boomers who keep their cars in the city, ride-hailing offers
We’re quite fond of running and publishing total cost of ownership forecasts here, whether comparing the Tesla Model 3 with the BMW 3 Series, comparing the Tesla Model Y with the Mercedes-AMG GLE 63 S, or comparing the Volkswagen ID.3 with the Volkswagen Golf. California utility PG&E Corporation has also joined the cost of ownership fun. It has a cost of ownership calculation tool for 52 electric vehicles on the market in California (plug-in hybrids as well as fully electric vehicles).
The example on the first page is the Tesla Model 3 Long Range versus the Volkswagen Golf R.
Clicking for details on what goes into the calculations, you get the following table, indicating that the 5 year cost of ownership comparison takes into account estimates for upfront price, electricity costs over time for the Model 3, gasoline costs over time for the Golf R, maintenance costs, and insurance costs:
I presume the calculator uses California medians for miles driven, electricity costs (probably a PG&E median here), gasoline costs, and perhaps insurance costs. Estimating maintenance costs is more of an art at this point, and how they determine insurance cost estimates is unclear to me, as that’s always been a tricky business.
Going a bit further, you can select your preferred EV here, can sort by EV type (full electric versus plug-in hybrid) or vehicle class, and also modify expected miles by changing the roundtrip commute distance, among other things.
One thing missing from the PG&E model is resale value. [UPDATE: Actually, it appears the initial cost includes an estimate for resale value in the equation.] Since it’s a 5 year cost of ownership model, that doesn’t really matter if you plan to keep the car for longer — say, 10 or so years. However, resale value should be a part of any true total cost of ownership calculation, especially when you consider that the Tesla Model 3 is expected to have much better resale value than competing cars. Nonetheless, even among those who do TCO (total cost of ownership) comparisons, I think it’s very uncommon to compare estimated resale values. You can always add that in fairly easily yourself, or can just use my comparison sheet.
If you’d like to explore and toy with the various assumptions, you can do so here.
Here’s one more example from me, the Hyundai Kona EV versus a similar non-electric Hyundai Kona:
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Tags: California, EV TCO, Hyundai, Hyundai Kona, Hyundai Kona EV, PG&E, Tesla, Tesla Model 3, Tesla Model 3 TCO, Utilities
About the Author
Zachary Shahan is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director,
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