Indianapolis Power & Light Co.’s corporate parent, Arlington, Virginia-based AES Corp., has started an electric-vehicle subscription service that is focusing on Indianapolis as its first market.
Following a ramp-up period that began this spring, Motor Drive formally launched in Indianapolis last month.
“We’ve been figuring things out and reached a point in Indianapolis where we were ready to go full-scale,” said Mike Barg, director of electric mobility for AES.
Barg said Motor Drive did initial testing in multiple cities but chose Indianapolis as its first official market because it’s a car-focused city and AES has a large presence in the market through IPL.
The service, Motor Drive, offers monthly subscriptions that cover use of a car, plus all insurance and maintenance costs. Customers get the vehicle delivered to their home, and they also have access to concierges who can help them find charging stations and answer questions about the vehicle.
Subscription costs vary, depending on the type of vehicle. A $649 monthly subscription offers a choice of a Nissan Leaf or Chevrolet Bolt; the $849 subscription offers a Tesla Model 3; and the $1,399 subscription offers either an Audi e-tron or a Tesla Model X. Customers can keep their chosen vehicle for the duration of their subscription, or they can switch to a different model from month to month.
The subscription rates aren’t cheap, but Barg said they are comparable to other options when factoring in the costs of traditional vehicle ownership, including fuel, maintenance, insurance and registration fees.
“We’ve tried to price this competitively,” he said.
Motor Drive is focusing primarily on Marion County but will also serve customers within a 50-mile radius of Monument Circle, Barg said.
To date, Motor Drive has signed just more than a dozen customers, with several more on a waiting list. Barg said he’s encouraged by the initial response.
Praveen Kathpal, vice president of new business at AES Next, said the company sees plenty of potential for growth in Indianapolis. AES Next is the business and technology incubator for AES.
“We see the market potential as pretty sizable,” Kathpal said. “We definitely see this growing well into the hundreds by sometime next year.”
Kathpal said the COVID-19 pandemic hasn’t put a damper on Motor Drive’s roll-out. In fact, the flexibility of the service and the home delivery of vehicles may be especially appealing for some customers right now.
Motor Drive vehicles come from a variety of sources, Barg said, with top priority going to sourcing from local dealers.
One person who will be keeping a keen eye on Motor Drive is Indiana Rep. Robert Morris, R-Fort Wayne.
“I’m closely watching it,” he said.
To his knowledge, Morris said, Motor Drive is the first subscription service of its kind in the state.
In 2018, Morris was a co-author of legislation that put a one-year moratorium on vehicle subscription services in Indiana. That moratorium ended in May 2019. Rep. Ed Soliday, R-Valparaiso, was the bill’s author.
Morris said his concern was that Indiana auto dealers would be left out the loop when it comes to vehicle subscription services. In the case of a recall, he said, it’s important that customers be able to access dealers so they can resolve the issue.
“It’s a very interesting concept,” Morris said of vehicle subscription services. “What I have to do is just ensure Indiana businesses are safe.”