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Why Most Electric Cars Are Leased, Not Owned (bloomberg.com)
Bloomberg's research shows that drivers in the U.S. lease almost 80 percent of battery-powered vehicles and 55 percent of plug-in hybrids. "The lease rate for the country's entire fleet hovers around 30 percent," reports Bloomberg, noting that Tesla does not divulge how many of its vehicles are leased since it sells its cars directly rather than through dealerships. From the report: The lopsided consumer preference for leases is fueled by the meager demand for battery-powered vehicles on the used market. Partly this is a consequence of public policy meant to spur electric vehicle adoptions: buyers of pre-owned cars can't grab thousands of dollars in federal and state incentives. The high lease rate is also fueled by the bet [many] are making that upcoming models will far exceed today's in value and capabilities. Perhaps electric vehicles will truly arrive when they are no longer compared to smartphones, which become obsolete after three years.
No shit. I lease my eGolf. Why - I leased it 2 years ago, and could get an 80 mile range car. Today for the same price I could get a 240 mile range car from Chevrolet, or a slightly nicer 120 mile range car from VW. I'm sure in a further 3-4 years I'll be able to get a 400 mile range car for the same price again.
It'd be completely crazy to bind yourself into a technology that's advancing so quickly at the moment.
When I looked into electric and hybrid cars a few years ago, most of them could ONLY be leased.
I don't know if that still holds, but it would set both a trend and expectations, so attempts to analyse customer preference based on owned/leased would be unfairly bent towards lease. It would be far more accurate to actually ask people with those vehicles if they'd rather own or lease the it if they had the choice.
if one truly cared about the environment, and was still wanting to drive themselves (for whatever reason)
Does it make more sense to:
a. new car, and all the energy intensive production needed to make it.
b. used car
Financially, the calculus is even worse (and gets worse the more you spend, like a fucking Tesla for example)
Tesla -> ~60k (there's other EV's of course, around what, 30k or so?)
Used economy car -> 5-10k ?
That price differential would more than likely be more than you'd spend on gas for the life of the car (realistically several of your life times).
I'll admit Teslas are pretty fricking cool, but i don't think they should be subsidized by tax breaks.
When the batteries are poorly managed (as on Leaf) then 2-4 years use
can reduce the battery capacity 50%. That large a drop in capacity does
not happen to everyone. But it happens. Depends on the use
of the vehicle and the temperatures it is used and recharged in.
Or so I gather from comments by owners.
But if well managed (as in Tesla) the batteries last a long time.
Our 2014 S had 100% battery capacity after 3 years (we traded
it in for a 2017 to get an even bigger battery and more
sensors).
In other words, battery life just depends. On stuff.
I have a five year old Nexus 5 which works just fine. I did replace the battery (and the screen after I dropped it) but the new phones aren't any faster and don't have any more features. I'll get a new phone when there is some new whiz-bang tech that I have to own but I'm happy now.
I don't read your sig. Why are you reading mine?
Nobody wants to be stuck with the cost of replacing the batteries when they stop effectively holding a charge, or they hold much less of a charge than when you first bought the vehicle.
EV batteries have different chemistries. They have turned out to be surprisingly long lasting, especially if properly cooled. Most new EVs have 8-10 year battery warranties.
My 2015 Tesla S still has 96% of the original battery capacity after 60,000 miles. I'm happy I bought it since leasing is expensive and I don't see getting rid of this car for a long time.
OTOH, I have heard that Leaf batteries don't last long since they don't have a good battery management system.
Leasing is sensible with EVs since the technology is changing fast. Tesla's are good since I get monthly software updates and the battery is good.
I don't read your sig. Why are you reading mine?
Three things drive this:
1. Battery tech continues to improve, both in charge time, discharge, and cost factors. Literally I've seen 20 basic patents for this in just the last two years here at UW Seattle. Thus, it's not worth buying, as the battery depreciates in value more rapidly than the car. Early EVs had 3-7 year lifespans and new battery tech usually means a retrofit to some of the internal systems or the chargers. So by leasing, you avoid buying into one form of tech, and can buy the winning tech (highest ROI and/or range) when the market stabilizes due to economies of scale.
2. Fear of accessibility. Vehicle charge routes keep changing, you may move or get a new job location and find it difficult to charge on either end. This affects renters and salespeople more than others.
3. Massive tax subsidies and exemptions for fossil fuel infrastructure and fleet purchases in the US make them less likely, except in urban car rental and rideshare scenarios.
-- Tigger warning: This post may contain tiggers! --
Isn't there something about lithium-ion batteries having a 3-year shelf/life
Un-conditioned lithium batteries tend to have a relatively low life, as measured both in charge/discharge cycles, and in total lifespan. Cell phones have this problem because the cost of Battery conditioning hardware, and the space/weight of such equipment makes it unacceptable for cellphones. As a result, Cell phone batteries (and for similar reasons, laptop batteries) have a useful lifespan of only a few years.
Car batteries by contrast feature bettery conditioning which maintains temperature conditions in the battery within an ideal operating range which greatly extends the lifespan of the battery (3x to 5x improvement).
I wish I had a good sig, but all the good ones are copyrighted
Apart for missing those security updates, which your phone hasn't received since October 2016.
The real "Libtards" are the Libertarians!
Most electric cars ship with a 10 year warranty on their battery pack.
That seems to be the take away for this.
Worst case scenario, replace the battery. Leaf cars can even replace individual cells rather than the whole battery.
excitingthingstodo.blogspot.com
Rural and suburban utilities are stealing the rural electrification administration budget (just under 1 billion$/year).
It's called rent seeking, it's understood, but a bitch of a problem. Constitution banned 'transfer payments', but long gone.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I seem to recall a lease was the only way you could get an EV-1 or the electric ford ranger unless you were doing fleet sales. Were the electric Rav4's sold or leased?
To understand why, you have to understand the economics of EVs. The real economics - not the "EV sales are rising because more people want them" rose-tinted version its proponents like to believe.
EV sales are taking off because of CARB (California Air Resources Board). They have a ZEV mandate (zero emissions vehicles - mostly EVs though Toyota has a hydrogen vehicle on the market). Beginning in 2013 or 2014, CARB required a certain percentage of each manufacturer's vehicle sales to be ZEVs or PZEVs (partial ZEVs - basically plug-in hybrids). The percentage goes up every year. The formula is a bit complex but it's about 2% ZEVs for 2018, and supposed to reach over 15% by 2025.
If a manufacturer fails to reach this percentage, the manufacturer must buy ZEV credits from another manufacturer which exceeded its required quota. This is what keeps Tesla afloat. Since they only sell ZEVs, they always have excess credits which they sell to other manufacturers who didn't sell enough ZEVs. That's right - if you buy an ICE vehicle, you are likely subsidizing someone buying a $70,000 Tesla. This is also why Tesla is in no hurry to ramp up Tesla 3 production. They don't want to flood the ZEV credit market - that would devalue their own credits. So they're going to ramp up production just barely fast enough to keep up with how many credits other manufacturers need to buy to comply with CARB's requirement.
If the manufacturer fails to sell enough EVs or buy enough ZEV credits, they are banned from selling cars in California. Since about a dozen states automatically adopt CARB's rules, that ban would extend to about 1/3 of the U.S. by population. No manufacturer wants to be banned from that huge chunk of the market, so they do whatever they can to sell enough EVs to comply with CARB's ZEV mandate. This means sales, discounts, incentives, whatever it takes to get however many EVs they need into buyers' hands to satisfy CARB's requirements. This is why the EV deals are better in California than in other states - CARB only counts EVs which are sold in California. So California is where automakers offer the biggest EV incentives. I almost pulled the trigger on a 3-year e-Golf lease in 2016 for $500 down, $79/mo in Los Angeles (the Bay Area had zero down, $79/mo available).
Since EVs are not actually popular with buyers (at least not at the percentage the ZEV mandate requires), this means the manufacturers have to sell the vehicles at below true market value to generate sufficient sales (sometimes even below manufacturing cost). If they're going to do this, leasing it is preferable to selling it. With a sale, they've lost the entire manufacturing cost of the vehicle. With a lease, they at least get the materials for the vehicle back at the end, which they can then reuse or recycle. And if the blue book value of the EV is less at the end of the lease than was projected, they can write off the difference and get a tax deduction for the loss. Leasing also allows anyone to take advantage of the full $7500 federal tax credit. Being a tax credit, you have to owe at least $7500 in income taxes to take full advantage of it. Based on IRS tax stats, this means the buyer needs to make more than about $70,000/yr to take advantage of the full tax credit. But if you lease it, the tax credit goes to the car manufacturer, who pays a lot more than $7500 in taxes each year. So they can take advantage of the full credit and pass it on to the buyer. That means the real price for a leased EV for anyone making less than $70,000/yr is often less than for a purchased EV.
All this is why the blue book value of a used EV is so low. The ZEV mandate only applies to new vehicle sales, not used EVs. The incentives lower the price, effectively causing more new EVs to be sold or leased than would've at the correct market p
There two major incentives to lease: price, and obsolescence.
When I leased, I got a very steep discount on the vehicle total price, and federal tax credit ($7500) was already factored in without going thru any hassles. Also sales tax (which is very high here in CA) is only paid for the portion that you lease every month, and not the full vehicle price. And, when I finally return the vehicle, there won't be another tax for resale, like one would when you do on the used market. Given the lease financing was about 0%, there were many economical reasons to lease than to buy.
And of course I was expecting the technology to progress fast, like many others, and it would not be wise to be stuck with a short range vehicle (even though I enjoy it in my commute) for the long run.
The manufacturer and the market just pushes you to lease than to buy with all these incentives.
A significant number of vehicles, in particular vehicles for business, are leased. This is because Congress hacked up the tax code a long time ago (80's version). And they made an overpriced MBZ require 100+ years to depreciate. The solution, lease. The entire lease is fully deductible on month 1 to end of lease. I believe that maintenance is covered as well, although many leases include all the normal services. Excluding tires, IIRC.
This was probably written up by someone that is too young to know the reason leases are so crucial to business customers. Taxes. They didn't follow the money, basic reporting done wrong. Is that the new Bloomberg way? Have to wait and see if they get something else right.
I live in New England. I've got a wife and 2 young kids. The only vehicle we own is a bicycle. When we need something that can carry us more comfortably, or longer distances, or with cargo, we use something else. Zipcar. Rental. Subway. Amtrak. Airplane. Taxi. Uber. Lyft. Carpool. Delivery service. For our lifestyle, the frequency with which we use those things costs less money than the rent we charge other people to park their cars in our garage.
Dumb? For some maybe. Certainly not for all.
Support a few technologists in Washington.
This was true in the first generation Leaf, after that battery tech has advanced enough where the batteries are lasting the life of the vehicle. There is a Volt owner with over 400k miles with no shown battery loss still.
https://www.greencarreports.com/news/1112485_2012-chevy-volt-has-now-crossed-400000-miles-range-remains-steady