Onto electric vehicle leasing company enters administration
Will continue to service existing customers
Electric vehicle leasing company Onto has been placed into administration as it had run out of cash. The company, which had a fleet of some 7,000 electric cars and a subscriber base of 20,000, has had Teneo Financial Advisory appointed as administrator.
Teneo has said: “the business operations will be maintained while it explores strategic options for the business.”
Onto’s model was to offer all-inclusive electric motoring for a fixed monthly cost. Onto’s subscribers pay a fee each month covering the the vehicle, insurance, servicing, public charging, road tax and breakdown cover. The monthly cost also allowed for up to 750 miles per month — higher mileages are possible for additional fees goes up. Lessees never own the car and can hand the car back at any time, on a monthly basis, unlike with finance deals such as hire purchase of PCP, which tie drivers into multi-year contracts.
Leasing from £529 per month
Onto’s exiting customers will continue to be served while it explores strategic options for the business. Monthly payments start at £529 for a Fiat 500e, which the company claims is some £300 cheaper than taking out a personal lease on the same car.
Onto, which is based in Warwickshire and launched in 2017, received multi-million-pound cash injections in May and June of this year. However, key investor Legal and General told Onto that it would not be investing any further money, triggering the collapse.
Previously raised £60m in funding
Last year, Onto raised £60 million in a funding round, at which time Legal and General described it as “an ambitious company with a talented management team that will play a vital role in accelerating the transition to electric vehicles.”
The collapse into administration seems to show that car buyers in the UK are still reluctant to move from traditional ownership and finance models.
Some see subscription services — in which a customer can more easily upgrade their car after a given period, and which in theory protects the buyer from unexpected depreciation — as perfect for the early days of electric car sales, given concerns that incoming new battery technology could render current models obsolete.
Onto originally pitched itself as a way for car buyers to try out an electric vehicle without getting locked into a long-term finance deal.
The company’s chief executive, Rob Jolly, said: “The concept behind the subscription is to make it more accessible, giving people the real benefits of an electric car without them being locked in for long periods of time – while realising of course, that once people try an electric car, the vast majority never go back.”
Even so, there seems to be some reluctance among buyers due to the perceived high monthly costs.
Car maker Volvo has been a leader in introducing all-inclusive car subscriptions, but currently only sees 15 per cent of its sales reach customers through that route.
Gavin Maher, who has been appointed Onto’s joint administrator alongside Jonathan Lees, said: “Onto has suffered from the steep fall in electric vehicle residual value in the first half of 2023, rising interest rates and the squeeze on disposable income, and was unable to secure additional funding from its shareholders. “
Onto continues to offer new subscriptions for models from Renault, Vauxhall, Tesla, Peugeot, Fiat, DS, Citroen, Hyundai, Volkswagen and Audi.
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