When investors hear the phrase "electric vehicles," the first thing many think of is luxury EV-maker Tesla. However, electric car-sharing programs are being rolled out around the world, and could not only change the perception of EVs, but also take them mainstream.
In Paris, Autolib, a sharing program launched in 2011, already has 140,000 subscribers. It was supposed to take five years for the system to turn profitable, but it did so in just a year-and-a-half. Now the billionaire behind that program is launching an EV-sharing network in Indianapolis, known as BlueIndy, with hopes of taking it to cities across the U.S.
Vincent Bollore, the industrialist behind Bollore Group, which runs the EV-sharing program, said in a recent Forbes article, "We want to demonstrate the electric car is not only a very high-priced toy for VIPs." Indianapolis may seem like an odd choice for EV-sharing, as Avis (NASDAQ:CAR)-owned Zipcar, the pioneer in American car sharing, targeted high-density cities like New York and San Francisco as primary markets for its business. However, Indianapolis, as a city of close to 1 million people, without widespread public transportation, seems to mirror many other cities nationwide and could be a perfect test to see if the program could work on a national scale. A green-friendly politician also helped pave the way for the program; Mayor Greg Ballard, who launched an Office of Sustainability in 2008, hopes to convert all the city's nonpolice vehicles to electric by 2025.
A promising start
Inspired by bike-sharing programs that have proliferated around the world, the Autolib program operates under a similar principle, with charging docks spread across individual cities. Users pay a membership fee and then a fee by the hour to rent a car. In Paris and the surrounding area, planners expect the network to reach as many as 1,000 locations with 3,000 vehicles. Following its success in Paris, Autolib has spread to Lyon and Bordeaux under different names and is expected to come to other French cities.
In March, Bollore set his sights on London, taking over that city's EV program, and plans to quadruple the number of outlets for charging electric vehicles there to 6,000.
Autolib isn't the only company getting in on the act, either. Kandi Technologies (NASDAQ:KNDI) last year launched a joint venture to provide electric vehicles in the Chinese city of Hangzhou. Kandi has already produced 6,700 EVs for the program, with plans to expand it to other cities in China. The company's stock boomed earlier this year on the strength of its EV sales in China as the government is making a big push for the pollution-free vehicles.
Unlike with traditional car-sharing programs like Zipcar, with Autolib, the EV user does not need to return the vehicle to its original parking spot. The program also eliminates the need for drivers to periodically fill up the gas tank, and helps reduce pollution in some of the world's most densely populated cities. Autolib even rents outs its chargers to private EV owners, who may need to "fill up" when they're away from home. In this sense, the EV-sharing programs could be a launch pad for wider EV adoption, as one of the key concerns with electric vehicles is the lack of charging stations.
What's next for BlueIndy
The Indianapolis-based car-sharing service is set to launch in December. With only 500 cars planned for the initial rollout, the program will be significantly smaller than the ones in London and Paris, but that's to be expected for a city the size of Indianapolis. BlueIndy has not yet set rates for rentals, but if the prices are anything similar to those in Paris, users can expect a monthly subscription fee of $13, plus $5 for the first 20 minutes to use the vehicles and $0.25 a minute after that.
With 80,000 college students in Indianapolis, the program's investors are hoping it will be a success among young people, and are locating four of the initial 25 charging stations on college campuses.
If the program meets expectations, planners project it to be profitable in five to seven years. Though it may not be behind the wheel of a Tesla, millions of Americans could soon be driving EVs if BlueIndy takes off.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.