Onto, the all-inclusive electric car subscription service, has fallen into administration.
Jonathan Lees and Gavin Maher from Teneo have been appointed as joint administrators of Onto Holdings Limited and certain subsidiaries.
The company website highlights that Onto has faced challenging market conditions due to the recent steep fall in the price of used electric vehicles, rising interest rates and the squeeze on disposable income. As such, the directors have taken the very difficult decision to put the company into administration.
Founded in 2018 by co-founders Rob Jolly and Dannan O’Meachair, Onto had a mission to provide a more accessible and affordable way for people to switch to electric cars, offering an all-inclusive electric car subscription service covering insurance, servicing, and public charging. With over 7,000 electric cars, Onto has grown to become the largest electric car fleet in the UK and one of Europe’s leading electric car subscription service.
Whilst rumours have been circulating that all was not well at Onto and they were looking for further investment, entering administration has happened quickly.
Chris Kirby, Co-Founder and CEO of Tomorrow’s Journey commented, “Onto has been one of the most prominent success stories in the subscription space. With 7,000 vehicles and 20,000 customers, it demonstrated real progress. With their proven traction and significant backing, there was some expectation that they would trade through this difficult period by cutting costs, but this hasn’t happened.
“It seems that the increasing interest costs and a challenging used car market has increased the pressure on a tight margin business.”
Kirby highlights that despite Onto’s financial failure, there is still a consumer appetite for flexible subscription models with many other companies such as SOGO, EZOO, Hyundai and Volvo offering car subscription services: “Over time, asset ownership (fleet) and service provision (subscription, sharing, etc.) will be split allowing companies to play to their strengths and mitigate concentrated exposure like what we have seen with Onto’s collapse.
“What will happen to Onto’s 7,000 vehicles and customer base remains to be seen, but this is a big blow to the growing subscription market.”
This further highlights the issues around the end of contract disposal of BEVs, according to Asset Finance Connect’s head of content David Betteley. Indeed, the problem of falling residual values (RVs) for electric cars was brought to the attention of the House of Lords Committee on electric cars, led by Baroness Kate Parminter, just last week by senior representatives from, amongst others, Autotrader and the BVRLA.
They advised that without some kind of support for the used market, the knock-on effect will be to depress sales of new BEVs (which also do not benefit from any support in the UK) further increasing the challenge of phasing out the sale of pure ICE vehicles by 2030.
David notes that, “the simple issue is that BEVs are more expensive to buy and much more expensive to run if the driver does not have access to a home charger. This makes BEVs much less accessible to low and middle income households who are much more likely to not have a driveway and therefore have to rely on public charging.
“The UK government should look at the examples of “social leasing” in France and Germany which aim to make used BEVs more affordable for low to middle income households. This would help clear the growing log jam of used BEVs in the market and, in turn, increase the take up of new BEVs.”