Onto calls in administrators blaming fall in used EV values

Car subscription service provider Onto has entered administration, blaming the “steep fall” in electric vehicle (EV) residual values (RVs).

Founded in 2017, Onto’s risk fleet had grown to more than 7,000 EVs by the start of 2023, having doubled in size over the previous two years.

Its monthly subscription model included insurance, breakdown cover and free public charging, with no deposit, no long-term commitment and the option to swap cars or stop the subscription every month.

However, while used EV values are reportedly beginning to stabilise, they have fallen dramatically in recent months, with 12-month reductions of 20-25% not uncommon as Tesla’s price cut in January spooked an already volatile market.

This fall proved too much for the business, which is based in Warwick, with Gavin Maher and Jonathan Lees of Teneo Financial Advisory appointed as joint administrators of Onto Holdings yesterday (Monday, September 11).

Maher and Ian Wormleighton were also appointed as administrators over certain subsidiaries of Onto Holdings.

Maher said: “Onto has suffered from the steep fall in electric vehicle residual value in the first half of 2023, rising interest rates and the squeeze on disposable income and was unable to secure additional funding from its shareholders.

“After entering administration, Onto will continue to serve existing customers as the administrators explore strategic options.”

Onto had secured £100 million of funding to continue expanding its UK fleet with new electric cars at the start of the year. 

The subscription service provider had raised a new credit funding line from global investment group CDPQ and independent asset manager Pollen Street, building on the existing relationship between Onto and Pollen Street.

The administrators said that they will maintain business operations with minimal disruption to customers as they explore strategic options for the business.