In simple terms, Moore’s law refers to the observation that computing performance roughly doubles every two years thanks to new technical innovations. This trend has largely held true since it was first proposed in 1975 and is now applied more broadly to describe the general pace at which new and emerging technologies evolve and improve while at the same time shedding costs.
In an internal combustion world, the automotive industry has largely remained exempt from Moore’s law, however with the adoption of electric vehicles rapidly gaining momentum around the globe, a unique paradigm shift is taking place that will change the way we buy cars from now on.
Electric vehicles will have more in common with the phone in your pocket than their ICE counterparts
As electric vehicles begin to share more in common with the mobile phone in your pocket rather than their internal combustion counterparts on the road, the impact of Moore’s law will inevitably result in EVs that charge faster, drive further, are smarter, more reliable and cheaper to manufacture.
And thanks to that mobile phone in your pocket, consumers have been conditioned to expect concerns over battery degradation, charge limiting and performance throttling as their electric vehicles begin to age. The consequence of this rapid innovation and learned behaviour is the desire for consumers to experience the latest in EV technology more often, thereby introducing a degree of planned obsolescence into the EV lifecycle.
It's not unreasonable to anticipate that the peculiar phenomenon of consumers camping outside Apple stores in late September for the release of the latest iPhone will be echoed across the automotive industry with the release of each new electric model.
Indeed, examples of this can already be seen with the recent launch of the BYD ATTO 3 in Australia which attracted a queue of hundreds to a local shopping mall (notably not a car lot) to get a peek at the newest EV model. But unlike an iPhone, not even the most affluent motorists would be in the financial position to purchase a new EV each year.
Enter car subscription
There is a powerful case to be made that as electric vehicles become ubiquitous, the preference for more flexible ownership alternatives like car subscription will become even greater. This 'iPhone effect' on electric vehicle adoption will see car subscription become the preferred means for consumers to get behind the wheel of an electric car as technology becomes the key consideration and they seek to upgrade their vehicles more often.
Research conducted by PureProfile and commissioned by Loopit revealed that 83% of future EV adopters would prefer to subscribe rather than buy, with 90% of respondents agreeing that subscription will help make electric vehicles more accessible.
This is not to say sales and finance will become extinct. Far from it. What we are already seeing is a transitory period for automotive incumbents as automakers and dealerships alike move from a pure sales model to become a one-stop-shop for all new mobility needs by offering subscription-based models alongside traditional sales offerings.
For the EV curious, car subscription also provides a unique opportunity for motorists to experience what it is like to own an EV without the upfront costs or long-term commitment associated with car ownership.