DETROIT -

Steer, a vehicle-subscription start-up that opened for business in May, has a mission that is “very clear and quite simple,” said its chief executive, Sonya Harbaugh, during a presentation in Detroit.

“Our mission is to build cleaner communities by accelerating the adoption of electric vehicles and delivering amazing customer experiences,” she said.

Steer’s fleet exclusively features battery electric, plug-in hybrid electric and hybrid electric vehicles. It is marketed as a hassle-free, no-commitment, alternative to traditional vehicle ownership and operates in the metropolitan Washington D.C. area only – for now.

There are plans to announce its expansion into a new market this summer, Harbaugh said.

Co-founded by Harbaugh and Erica Tsypin, Steer is owned by Exelon Corp. Tsypin is Steer’s COO.

Clutch Technologies, a subscription and mobility services software company owned by Cox Automotive, powers Steer’s subscription platform.

“These cars are amazing to drive — they’re fast, they’re packed with technology and kids love and go crazy over them,” said Harbaugh of EVs, during an interview subsequent to the Detroit presentation.

“But if you look at what’s going on in the marketplace, they’re still barely 2% of the cars on the road. So, that’s where I really got anchored in to all of this, to figure out what is the problem? What’s going on? That’s where we saw a real opportunity with our expertise.”

Here’s what’s going on

Steer grew out of Exelon’s new business incubator which is run by its Corporate Strategy, Innovation & Sustainability group, which also invests in sustainable startups.

During the incubator group’s research of EV adoption, it found that consumers don’t really understand EVs, perceive them as costly and cite range anxiety as their top concern when it comes to purchase consideration, Harbaugh said.

It also discovered a real “challenge” between what the manufacturers are trying to accomplish when bringing EVs to market and the dealer distribution channel which isn’t fully prepared to support the vehicles, she said.

Cox Automotive’s “Evolution of Mobility: The Path to Electric Vehicle Adoption” study, released in 2019, supports those findings.

Of the 2,503 consumers surveyed by Cox Automotive, 1,000 were identified as “non-considerers” of EVs. Among the non-considerers, 83% cited battery /charging concerns as barriers to EV adoption and 70% cited cost.

Easy vehicle swaps

Steer is easy to use, Harbaugh said. Subscribers arrange for next day vehicle swaps though an app and its month-to-month subscription model includes insurance, maintenance, repairs and unlimited mileage.

Steer offers three plans.

Its most affordable plan, according to www.steerev.com, is Practical Advantage. At $889 a month it allows two vehicle swaps per month and seat time in vehicles such as Nissan Leaf, Chevy Bolt EV and Toyota Prius Prime.

Its Preferred 3 plan includes the Tesla Model 3 only, costs $1,089 per month and includes no swaps.

Steer’s most upscale plan, Premier Performance, costs $1,689 per month and includes an unlimited number of vehicle swaps during the month. Some vehicles available under the plan are Porsche Panamera, BMW X5, and Tesla’s Model X, Model 3 and Model S.

Steer also requires a one-time-only, non-refundable $500 activation fee, plus taxes.

The monthly subscription plans include vehicle delivery by Steer’s concierge team, who walk customers through a demonstration of each vehicle, Harbaugh said.

“A Tesla is very different from the Audi e-tron is different from the Jaguar I-PACE is different from the Nissan Leaf — you name it — they’re all quite different,” Harbaugh said.

“Where the charge ports are located and the type of charger you can go to because adapters are different.”

Alleviating range anxiety

Harbaugh said Steer’s business model can diminish subscribers’ range anxiety by giving them the ability to swap, a battery electric or plug-in vehicle for a hybrid that doesn’t have to be charged and can run on gasoline.

Steer helps subscribers find charging stations near their homes, their workplaces and along road trip routes. It can help subscribers decide if a home charger is a good fit for them, Harbaugh said.

Road trips aside, consumers drive 40 miles per day on average, meaning that “your all-electric EVs are more than capable of your everyday needs but you just need to have that security, that reassurance that you’re going to have a solution before you make the leap,” she said.

Harbaugh said Steer has doubled its subscriber “memberships” since it started and has 16 different makes and models in its fleet. Harbaugh said Steer expects to add new vehicles, such as Ford Mustang Mach-E and Tesla Model Y, this year.

Disruptive

The Cox Automotive study also polled 308 dealers who were asked – among other things — what barriers keep them from selling more EVs.

Fifty-five percent of dealer respondents cited lack of inventory; 50% cited not enough charging stations, 33% blamed lack of factory support and 32% faulted poor EV sales training.

Harbaugh admits that Steer’s business model is “potentially disruptive” to the traditional retail auto industry because it competes with dealerships to get consumers into its vehicles, but she said the model does not have be disruptive to dealers’ businesses.

Steer buys its vehicles from dealerships and takes them back to the dealership for service, she said.

And as vehicles transition from gasoline-powered to electrification, energy utilities such as Exelon, will have a role. That means that all stakeholders will have to collaborate on new solutions that make it easy and create good experiences for consumers, she said.

“We have some close relationships with some local dealers because where we compete potentially on the front end, we are business partners on the back end,” Harbaugh said.

“I don’t think subscriptions should be viewed as a negative. It’s just a different way to think about how we all work together.”