Electric Vehicle Start-up Poised to Disrupt the Automotive Industry

Posted to Smart Electric Power Alliance (SEPA) in the Load Management Group
image credit: Erika Myers
ERIKA MYERS's picture
Principal, Transportation Electrification Smart Electric Power Alliance

Erika H. Myers is a Principal of Transportation Electrification for the Smart Electric Power Alliance (SEPA). Erika has 16 years of experience in the clean energy sector and specializes in the...

  • Member since 2019
  • 5 items added with 13,292 views
  • Dec 17, 2019

The automotive manufacturing business model has not changed much over the past century. Car sales are the primary revenue generator for auto manufacturers today, but as shared, electric, and autonomous vehicles enter the market and demand for alternative options to car ownership grows, start-ups with innovative models are ready to challenge the auto ownership status quo. Looking to capitalize on these disruptive technologies, electric utilities are exploring business opportunities that serve changing consumer demands - particularly as they seek to grow electricity loads in their service territories.

Enter Steer EV. Steer’s monthly electric vehicle (EV) subscription service gives customers attractive options - requiring no down payment and including unlimited miles, insurance and maintenance, road-side assistance, vehicle swapping, and a concierge delivery and pick-up service. The service has three plan options - the Premier Performance Plan, featuring cars from Tesla, Porsche, Jaguar, Audi, and more, the Preferred 3 Plan featuring the Tesla Model 3 and the Practical Advantage Plan, featuring cars from BMW, Nissan, Chevy, and Toyota, and more. The Steer plans also include a SteerPass, which is a solution that provides easier access to charging at public stations.

Steer could succeed where others have floundered. Not only does Steer allow members to drive the widest variety of EV and hybrids on the market, but its focus on customer service sets it apart. Steer is born from a corporate-incubator from Exelon, the largest clean energy provider in North America. This means Steer not only deeply understands electric cars and charging needs, but they are free to re-think the burdensome process of buying and owning a car. This car subscription service has the financial backing to support a capital-intensive operation, and they also are targeting a customer demographic that values flexibility, ease, performance, and the latest advanced clean technology. As Steer’s backer, Exelon views electrification as a key strategic initiative that it is investing in across its various operating companies.

I met with Erica Tsypin, the COO of Steer, for coffee in June where I had the chance to ask her more questions about the powerful and potentially disruptive company she co-founded with her colleague, Sonya Harbaugh. When I asked Erica what success looked like for Steer, she said it was simply “more EVs on the road by reducing every barrier to adoption.”

Prior to launching Steer, Erica and Sonya identified a broad range of innovative opportunities in the transportation electrification space. The team settled on the Steer business model because they believed, “there needed to be a revolution in transportation. Everything else in your life is on-demand, tailored to fit your life, and, of course, available through an app — so why shouldn’t your car be too?”

Currently, the service is available in the Washington DC metro area, including Maryland and Virginia, and the company is evaluating other cities for future rollouts.

Steer feels like they have an advantage over their competition because they come from an entirely different perspective and aren’t encumbered by entrenched automotive sector policies, politics, or regulations. They don’t want to sell cars, they want to provide their customers with a service that helps meet their needs, as well as support Exelon’s broader goal of decarbonizing the grid via electrification.

Carbon Reduction strategies must include electric vehicles

According to the U.S. Environmental Protection Agency, transportation is now the leading contributor to greenhouse gas emissions, and increased adoption of EVs is a primary means to reduce these emissions. Further, EVs are important tools to allow utilities to integrate more clean energy. Intermittent sources of electricity, like solar and wind, will face grid integration challenges as they reach certain levels of penetration. As we’ve seen in Hawaii, when there is insufficient demand for the output from renewable generation, those resources are curtailed at a large cost to ratepayers and/or customers. Utility battery storage is touted as one potential solution to store excess renewable energy, but it comes at a high cost. If utilities could instead leverage the on-board batteries of EVs by delivering extra energy into EV batteries during periods of peak production, it would yield social benefits, such as improved economics for higher levels of renewables, decreased costs for consumers, and incentives or rewards for EV drivers.

This scenario illustrates one important goal of vehicle-grid integration - a strategy whereby energy can be stored (i.e., managed charging) and potentially retrieved (i.e., vehicle-to-grid) through EV batteries. Utilities are examining similar opportunities through other electrification strategies, such as all-electric homes. Finding ways to effectively and economically use high penetration of renewable energy is critical to all carbon reduction strategies.

Utilities are identifying strategies to educate customers about electric technologies, particularly EVs which present the largest opportunity. According to a Smart Electric Power Alliance (SEPA) report published in 2018, Utilities and Electric Vehicles: Evolving to Unlock Grid Value, many utilities are taking proactive steps to educate their customers through information on their website, hosting ride-and-drive events, and offering incentives. Steer EV is taking this education and outreach to the next level.

Experimentation and learning is key

As with any new innovation, experimentation is critical in Steer’s early days. They started with a simple question: How can we de-risk EV ownership and make it effortless to drive electric? Subscription answers several common problems:

  • Range anxiety: Simply swap into a hybrid or let your concierge plan your charging route
  • Commitment fear of being stuck with the wrong car or old technology: The Steer fleet is constantly being updated and the subscription commitment is only month-to-month
  • Up-front price: Members pay one transparent fee that include insurance maintenance, and repairs, plus no mileage restrictions

The team tested with consumers for a year and validated a clear demand for Steer, particularly in the DMV where people have long commutes, hectic schedules and value convenience. Steer is not just for EV and Tesla-lovers. Notably, Steer has already reached an audience with limited previous EV exposure. Among those that have signed up for email alerts, over 70% had no previous EV knowledge or experience. EV education is a critical component of Steer’s mission and getting people in cars to experience EVs and have them become EV fans is a priority.

For energy industry folks – like those reading this article -- might be hesitant to make a big investment due to uncertainties, like ease of charging. You might find a subscription model to be a way to test out the technology before purchasing an EV.

Looking Ahead

So far, Steer has been operating mostly under the radar as they work out the details of their operations. They recognize that they are being closely scrutinized and critiqued by the auto industry. Steer is conducting their initial marketing only through digital channels. In fact, I clicked on their Facebook ad, which is how I became aware of the company.

Being a disruptor is not easy, but the feedback has been incredibly positive so far. Steer believes that word of mouth promotion is the best method for them to attract new customers, and Erica is convinced that “customers are hungry for options like Steer is offering. The current model of car ownership is not only expensive, but also a hassle for the average consumer.”

Will car subscriptions be the future? Steer is betting that the answer will be yes.

Smart Electric Power Alliance (SEPA)
The Smart Electric Power Alliance (SEPA) is an educational nonprofit working to facilitate the electric power industry’s smart transition to a clean and modern energy future through education, research, standards and collaboration.
ERIKA MYERS's picture
Thank ERIKA for the Post!
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Matt Chester's picture
Matt Chester on Dec 17, 2019

Steer’s monthly electric vehicle (EV) subscription service gives customers attractive options - requiring no down payment and including unlimited miles, insurance and maintenance, road-side assistance, vehicle swapping, and a concierge delivery and pick-up service.

I wonder who this helps get into an EV the most-- is it city drivers who don't want to commit to owning a car? People who can't afford the down payment? People who drive less frequently so find it harder to justify?

ERIKA MYERS's picture
ERIKA MYERS on Dec 18, 2019

The correct link for Steer EV is

Mike Cassity's picture
Mike Cassity on Dec 18, 2019

Steer sounds exciting. Thanks for sharing.

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