Car subscription firm Carbar lands $28.9m from Seven and IAG as it eyes more EVs

Car subscription firm Carbar has secured a sizeable $28.9 million in a funding deal with media giant Seven West and insurance group IAG, as it eyes a goal for one in four of its cars to be all-electric “over the next few years.”

With seven EV models already available to drivers wanting to go electric but not keen on the higher upfront costs of ownership, the company says it has already increased the proportion of zero-emissions vehicles in its fleet from 5% to 12% since it announced a $50 million injection from Sydney based credit investor Global Credit Investments (GCI) in July.

A search on the company’s website shows the EVs available for subscription include a Nissan Leaf, MG ZS EV, Hyundai Ioniq Electric, Hyundai Kona EV, Kia e-Niro, Tesla Model 3 and Mini Cooper SE.

The new funding will enable it to broaden its capabilities, including a marketing campaign to drive EV uptake via subscription, the company said in a note.

It believes that a trend away from private car ownership seen overseas will also be seen in Australia, with the right push.

“This round will help us expedite growth in the business and make Carbar a household name. While we are thrilled with our growth to date, we realise that our current round of car subscribers are really early adopters,” said Carbar co-founder and CEO Des Hang.

Acknowledging that the current situation for EVs in Australia is dependent on a number of factors – not least the difficulties in securing actual vehicles, resulting in a supply crunch that even Tesla appears to have succumbed to, he told The Driven in a note that, “This is a moving target with plenty of variables, including supply chains, cost of EVs, EV policy in Australia and also further installation of EV infrastructure.”

“As a result we can’t narrow down this goal (for 25% EVs) further as there’s too much uncertainty in the broader market.”

Carbar has already seen a 2,000% increase in subscribers since 2019, and Hang says a survey conducted by the company shows that demand for EVs can further drive car subscription.

“This is all demand-driven,” he said. “Our latest study with YouGov found that 7 in 10 (71%), the equivalent to 4.2m Australians, would consider taking out a subscription to an electric vehicle.

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Given this we suspect we will see intense interest for EVs when Carbar launches its own campaign.”

He says that partnerships with AGL, sonnen and Aurora have already driven spikes in demand for EVs, amnd that company is eager to sign up more partners.

“This is a growing market too, as the same research found that Australians are willing to subscribe to cars from a number of companies, including NFPs and telcos.”

With seven models alreay available for subscription, he says, “This will grow as more companies bring their EVs to Australia, and our range will be driven by demand. We’re a strong advocate for further government support to broaden the range of EVs available in Australia and in turn lower costs — which continues to be the primary barrier to entry.”

Current EV models can be hired from as little as $279 a week excluding upfront fees which start at $1,600 at the start of a new subscription.

According to a note from the company, “the weekly subscription fee aims to cover the cost of owning, maintaining and running a car such as depreciation, interest, registration, insurance, routine maintenance, roadside assist, mechanic faults, faulty and worn tyres and batteries.” Electricity costs are not included.