An Austin startup that wants to get people into electric vehicle leases in as little as five minutes is finding fresh traction and putting more EVs on the road.
Ferry Automotive Inc. recently announced it is now leasing Tesla Model 3s and Model Ys through its app-based platform. The company says it is making EVs more accessible — which coincides with a boom for the industry in Central Texas.
Ferry continues to expands its inventory, improves its app and build partnerships after raising $4 million in seed funding earlier this year. It has a waitlist of more than 5,000, with more than 2,000 in Austin.
So far, the company is only leasing out electric Vespa scooters. But Ferry executives said it is seeing multiple leases per day for the Teslas, which will be delivered over the next month. Leases for the smaller Model 3s start at $799 a month, while the Model Y SUVs start at $999 per month. For comparison, the Vespas start at $179 per month.
Lower-price EVs will be introduced in the fall. according to Ferry CEO Kristian Russell, who sees tremendous growth potential for the business. By fall, he expects Ferry to be leasing 50 to 100 vehicles a month in Austin, and another 50 to 100 in California. He expects to exceed the company's goal of 1,000 car leases by year's end. The company currently employs 22.
"We're on the cusp of a massive technological shift." Russell said. "I think we're going to see more value created within this ecosystem of charging e-mobility payments, infrastructure ... similar to the invention of. or the ubiquity of, the internet.
We're going to see an extraordinary amount of value created within this space. The U.S. is nascent in this category. The U.S. is the biggest market in the world. There's a huge amount of opportunity, and investors are seeing that."
Ferry says the process of signing up for a lease through its app can take as little as five minutes. Leases run for six, 12 or 24 months, and the app educates first-time electric vehicle drivers by showing them how and where to charge. A common source of concern among new EV owners is the nation's paltry charging infrastructure compared with the ubiquity of gas stations.
Ferry sources its electric vehicles through Inspiration Fleet, an EV-only fleet management company. It's part of Inspiration Mobility Group LLC, an infrastructure investment platform exclusively focused on the real assets that enable the EV transition.
From talking with potential customers, the company is looking to expand into other parts of Texas, likely in the Dallas and Houston markets. To keep up with demand, Ferry is pursuing series A and series B funding rounds and is in talks with 35 venture investors and strategic investors, its CEO said. Russell hopes to close a series A round by September, which would allow the company to scale up beyond San Francisco, Los Angeles and Austin, where it currently operates, and Miami, where it will roll out next. A series B round would likely follow in mid- to late 2023.
Even in a volatile venture climate, Russell believes securing capital will be possible as consumer purchasing habits trend toward EVs. Deloitte estimates annual EV sales of 31.1 million worldwide in 2030. a compound annual growth rate of 29% from 2020. That 31.1 million figure would represent about 32% of all new vehicle sales in 2030, compared with less than 10% of today.
Ferry's customer base consists of millennials, with an average age ranging from the early to late 30s. Some customers are relocating to Austin without cars and want to try out an EV. The company wants to expand its vehicle selection, including more affordable options such as the Hyundai long 5, Ford F-150 Lightning, Hyundai Kona Electric and Ford Mustang Mach-E.
Ferry represents another way for Austinites to get into a Tesla. The company, which has EVs rolling off the line at its factory in eastern Travis County and now calls Austin its headquarters, cannot sell direct to consumers in Texas because of state regulations. The Elon Musk-led company has showrooms/services centers in North and South Austin, and a showroom at The Domain.