All-eletric car subscription provider; ONTO has today entered administration after being hit by the falling prices of electric vehicles. ONTO have over 7,000 vehicles on fleet and have introduced over 20,000 customers to subscriptions from day one.
One of their largest backers was Legal & General who recently said that they would not provide any further funding to ONTO, they had reportedly already provided £22.5m into the company. ONTO were also on receipt of a recent funding round where they raised circa £47m.
Why has ONTO failed?
ONTO purely focused on electric vehicles, think back 12-18 months there were some high initial outlay on these vehicles. With the government subsidaries being cut and with falling EV pricing ONTO have really struggled with the financing of these cars due to them all being secured to the assets.
With over 7,000 vehicles in its fleet at the start of 2023, if each car was to prove a loss it, it is very difficult to either increase the prices or take the hit on the disposal of these vehicles and fulfil the financing contracts.
Comments from the Industry
We have spoken with a nunber of our car subscription contacts who have provided the following comments:
"ONTO have made some massive in-roads over the last few years, but they have not taken into account that Electric Vehicles will become more mainstream, with lower starting prices resulting in lower residual values. On top of that, companies such as Drover and ONTO have priced their cars to put people in them, whilst using the funding rounds to cover any shortfalls."
"We're not cheap and thats for a reason, the market is volatile and many of the vehicles have been based on Covid period residual values, it is tough out there, but vehicles need to be priced accordingly. I just hope the staff find jobs during this difficult period."
ONTO Alternatives
The direct competitor to ONTO would be Elmo Car Subscriptions, but any of the vehicle subscription providers can help.
More Information
If you would like more information on the ONTO administration, please use the external links below: