Short-Term Car Rental Startup Kyte to Offer the Tesla Model 3 as a Monthly Subscription
【Summary】Imagine being able to lease a Tesla Model 3 for 6 or 12 months instead of spending tens of thousands of dollars to purchase one outright. That’s exactly what car subscription startup Kyte is doing. The San Francisco-based company announced on Thursday that it’s adding the Tesla Model 3 to its short-term vehicle subscription options as its works to electrify its vehicle offerings.
Imagine being able to lease a Tesla Model 3 for 6 or 12 months instead of spending tens of thousands of dollars to purchase one outright. That's exactly what car subscription startup Kyte is doing. The company announced on Thursday that it's adding the Tesla Model 3 to its short-term vehicle subscription offerings as its works to electrify its platform.
For those looking for the experience of driving a zero emissions Tesla vehicle, Kyte allows them to do so without a long-term commitment or expensive deposit. The new fleet of premium Tesla Model 3 sedans will be available in Kyte's San Francisco and New York City service areas starting April 15.
The electric sedan will eventually be available in all of Kyte's current 14 markets.
Kyte was founded with a mission of making driving a new car easier, by paying a more affordable monthly subscription rather than purchasing or leasing a popular vehicle like the Tesla Model 3, which starts at $46,990 in the U.S.
Paying a monthly fee is not like a typical lease. It includes maintenance, insurance, registration, and roadside assistance and serves as a replacement for traditional car ownership, especially in urban areas where owning a personal vehicle is more difficult and expensive. The monthly costs however don't include the cost of charging the Model 3.
"We clearly see a gap between short-term rentals and leasing or buying a vehicle, and we think subscriptions is the answer," Erik Zahnlecker, Kyte's director of new products, told Business Insider. "People don't want to wait in line for their groceries, food, shopping, or their car rental, they expect it to be delivered to them. They expect convenience, and that's what we're providing."
In early March, Kyte announced it was pausing its standard vehicle class subscriptions and instead will focus solely on expanding its new Tesla subscription service.
Before launching its service using the Tesla Model 3, a typical economy car short-term subscription such as the Toyota Corolla, costs around $58 per day in San Francisco. A standard SUV costs roughly $62 per day.
Subscribing to a Tesla Model 3 on the Kyte platform starts at $995 per month for a 12-month term. The electric sedan subscription will also be offered in three-month or six-month terms. Kyte says it plans to expand the Tesla vehicle service to all of its 14 markets.
Kyte will initially offer the Model 3 Long Range, which starts at $54,490 in the U.S. This version has all-wheel drive and 358 miles of driving range. The subscription costs include a $299 startup fee. The 3-month plan cost $1,350 per month, $1,125 per month for the six month plan and $995 for the year.
For those customers that want to continue to drive the Model 3 after the initial subscription term expires, it can be extended at any time.
Leasing the same vehicle from Tesla for 36 months requires a down payment of $4,500 down and 36 monthly payments of $629. In addition, mileage is capped at 10,000 per year. The total cost of the lease is $27,144, which doesn't include insurance or maintenance.
Kyte partners directly with professional fleet owners, including rental car operators, to make their vehicles available on the Kyte platform, helping them achieve maximum utilization and return on their investments.
This rollout of the Tesla Model 3 on Kyte's platform is the next milestone in a series of recent successes by the California-based car leasing startup.
"Being able to expand our fleet and amplify EV adoption is mission-critical. We don't want to only be innovators in how we give people access to cars, but we want to be a catalyst for the rapid change going on in the transportation industry as a whole," said Erik Zahnlecker, Director of Product at Kyte. "This rollout is pivotal to our growth strategy and core to our electrified, autonomous, and shared vision."
How Kyte Works
Using the Kyte mobile app available for iOS and Android devices, customers can book a car for a day, multiple days, multiple weeks, months, or however long they want. At the time of booking, customers are charged a standard deposit of $300 dollars for credit card bookings and $500 for debit card bookings. The hold is placed on the cards the day your trip starts. The hold is released upon the vehicle's return. Kyte accepts all major credit and debit cards.
One the vehicle is returned to Kyte, its cleaned and sanitized and prepped for the next subscriber.
Cancellations made 48 hours prior to a scheduled delivery time are eligible for a full refund. Cancellations made within 48 hours of a scheduled delivery time are eligible for a full refund in Kyte credit on a future vehicle subscription.
To start the process, customers choose a time and location for their vehicle delivery. Then, Kyte dispatches a delivery driver which the company refers to as a "Kyte Surfer" to deliver a clean and sanitized car at the time and location requested. When the vehicle is ready to be returned, a Kyte Surfer retrieves the car from the customer at the location and time of their choosing.
With its car subscription service, Kyte aims to give people better access to fewer cars and replace car ownership by offering access to cars on-demand. The platform also helps to increase vehicle utilization and takes more cars off the road for a more sustainable future while saving customers time and money.
Kyte was founded in 2019 by Nikolaus Volk, Ludwig Schoenack, and Francesco Wiedemann, and is headquartered in San Francisco, CA. The company also has offices in Munich, Germany, and satellites across the globe.
The announcement follows the company's recent announcement of a significant round of asset-backed credit financing from Goldman Sachs and Ares Global in the amount of $200 million on March 24 that will help to accelerate the company's fleet growth and margin expansion.
"We are building a real business with real assets in the real world. To get this right, we needed a debt capital provider that shares our ambitious vision and can put real money behind it," said Ludwig Schoenack, Co-Founder of Kyte when the $200 million credit line was announced. "The credit facility from Goldman and Ares will catalyze our growth as we build towards the future of transportation."
Kyte plans to add thousands of Model 3s to its platform in 2023. With additional electric models over time.
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