Today my co-founders and I announced a company that we have quietly been working on for over a year.
This company had an unusual path to creation.
It started in the fall of 2019 when, for the third year in a row, we had “fire season” in San Francisco. Smoke from wildfires made the air unhealthy. Local stores ran out of masks and air filters. My kids’ schools stopped classes. Friends fled the area. It felt like the world was on fire and local fires were a manifestation of the global climate crisis. I began to think, what can I do to help?
Inspired by the successes of solar, I’d been kicking around the idea of a “Mileage Purchase Agreement” for electric vehicles. I’d shared it with auto manufacturers and automotive entrepreneurs hoping some of them would run with it. They didn’t. In the language of startups, the idea didn’t yet have a clear product-market fit.
To state the obvious, when pursuing product-market fit there are two sides that must be nailed: the product and the market. It’s not as easy as it sounds. Most startups run out of money before they figure it out. Large businesses often lose focus and patience before finding it.
If the MPA didn’t have product-market fit, I thought, why not get a lot of entrepreneurs to help? I launched the Spring Free EV Contest to help figure out product market fit. Over 20 teams from five countries joined. If we could identify and quantify the opportunities, someone would take these ideas and run with them.
Contestants considered a myriad of pathways. Some groups dove into heavy trucking, others looked at delivery fleets, two groups went after the three-wheelers that are ubiquitous in places like India. Teams also looked into a number of geographies outside the US. Out of all the teams we awarded prizes to the top three. Our first place winner, Flux, has gone on to raise a pre-seed round and is now providing MPAs to consumers in California.
The contest taught me that there are many passionate entrepreneurs chasing innovative ways to deploy electric vehicles. We also learned that deploying electric vehicles into larger fleets is challenging because charging infrastructure is more complex and decision cycles are long.
The evidence was pointing to ridesharing and carsharing as the early adopters of an MPA. They need sedans and hatchbacks which are already being produced as EVs. They are distributed fleets, simplifying the charging infrastructure problem. And they do a lot of miles — 2,000 to 4,000 a month — making them excellent candidates for MPAs.
Considering my earlier failure at climate impact, I wanted to be certain we could get to gigaton scale with the MPA. I did another spreadsheet to figure out what it would take. The answer is audaciously big. We must add about 100 million EVs on the road to reduce emissions by one gigaton a year. That is a lot. Taking a page from what fintech innovations accomplished in solar, however, it is possible.
Getting to a gigaton required a highly scalable model. To help figure that out, I recruited my friend, Marty Lagod, a former cleantech VC, into the effort. He, in turn, brought in Cassandra John, a former Wall Street executive. Now we were a team with real depth on the key ingredients: technology, startups, rapid growth, project financing, debt financing, and structuring financial instruments. With our complimentary skills, we set out to have a major climate impact. How could we get to a gigaton?
Today we are publicly launching Spring-Free EV, Inc, a financial technology company built to accelerate the adoption of electric vehicles (EVs) through innovative fintech products. Our strategy is to rapidly scale by enabling many entrepreneurs around the world to operate EV fleets. We set the top goal of the company to try to achieve gigaton scale.
Ridesharing and carsharing are our initial focus. Today we provide EVs to entrepreneurs who operate fleets on carsharing platforms or that are rented to gig workers. We charge them on an MPA model. Some like Flux offer an MPA to the public with a focus on ridesharing drivers. Others like Handifleet operate primarily on Turo and direct rental. We estimate there are single-digit millions of vehicles in the US engaged in gig work. The gig economy will be a great start toward a gigaton, but we won’t stop there.
We envision working with other businesses and entrepreneurs pursuing other niches beyond ridesharing and carsharing. As the contest highlighted for us, there are many avenues to pursue. By partnering with thousands of entrepreneurs and businesses around the world, we see the path to increase the number of EVs on the road, help entrepreneurs achieve their dreams, and build thriving businesses. That is how we get to gigaton scale and have a major impact on climate change.