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A Battery is Expensive - so, Lease

Discussion in 'Electric Vehicles' started by vfx, Oct 29, 2007.

  1. TEG

    TEG TMC Moderator

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  2. Robert.Boston

    Robert.Boston Model S VIN P01536

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    consumers want to recoup extra cost in a year

    NYTimes.com: Wanted or Not: Alternative-Fuel Cars Flood Auto Show
     
  3. ckessel

    ckessel Active Member

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    #5 ckessel, Jan 10, 2012
    Last edited: Jan 10, 2012
    Seems like there should be some way for an EV manufacturer to offer a cheaper up front price and a pay-as-you-go on the battery. I think a solar company does that (Solar City?) where the installation is cheap or free and you rent the panels, but the energy savings basically pays for the rental cost and then some. If there was a way to set that up for EVs it would bring the "base" price down below an equivalent ICE and the battery "rental/lease/whatever" cost would be offset by fuel savings.
     
  4. dpeilow

    dpeilow Moderator

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    That is exactly what Renault is doing.
     
  5. TEG

    TEG TMC Moderator

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    Nissan had basically said the same thing for the LEAF at first:
    Nissan to lease LEAF battery for $150/month
    But then did a change of direction and decided to keep the pack as part of the car:
    No Battery Leases for Leaf, Says Nissan.

    Some of it may have been due to bad PR / backlash from people still remembering the GM EV1 "we are taking our cars back" fiasco. There had been concerns expressed like "what if they don't renew my battery lease?"
     
  6. ChadS

    ChadS Petroleum is for sissies

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    I don't understand why "long payback" is a problem. I mean, I understand that people psychologically don't like to take a hit now for a payoff later. But I don't think that applies here.

    Most people get a loan or lease anyway. Let's say a gas Focus is $250/month, and a Focus electric is $375/month. But the average US driver saves $121/month in fuel costs, so they get their "payback" (same monthly outgo for a better car!) immediately.

    What am I missing? (Serious question; I have never had a lease or loan and only look at TCO, so I don't understand how most people buy). Are they really only considering up-front costs, and not the payment? Are my guesses on the lease rates that far off? I know Leaf and Volt can be leased for $350.

    I suppose one problem with a higher-up-front car is that if the car is destroyed, or sold underwater, you are on the hook for a larger loan payoff. But then again, if nothing happens to your gas cars but gas prices continue to rise, you are on the hook for larger gas payments. Another problem could be that the down payment would have to be higher.
     
  7. ckessel

    ckessel Active Member

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    The article said folks want to recoup within a year, so it's pretty much the long payback issue. It's also a sticker shock marketing issue . If you can bring the MSRP sticker price down that helps get past one of the initial hurdles of getting someone to look at an EV.
     
  8. ChadS

    ChadS Petroleum is for sissies

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    #10 ChadS, Jan 10, 2012
    Last edited: Jan 10, 2012
    I understand the sticker shock part, because most people haven't calculated how much they spend on gas (average car 22mpg, 150k miles - that's 6,818 gallons, at $3.50 per gallon (like it's going to stay there!) that's almost $24k.

    But I still don't understand what "payback" people are looking for. I understand many lazy people might not do the math and have sticker shock; but if they don't do the math, how do they "know" the payback "takes several years or more"? In some cases (as in the example above) the monthly payments for EV + fuel will be less than gas car + fuel.
     
  9. ckessel

    ckessel Active Member

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    #11 ckessel, Jan 10, 2012
    Last edited: Jan 10, 2012
    You give vastly more credit to the average person than they deserve :). "I was told there would be no math" is practically a lifestyle motto these days.

    They look at the two prices and basically go "that one looks enough bigger that I'd have to do math, so it must be worse." If you have to do math to show something to them, they look at you suspiciously like you're doing a magic trick. Seriously.
     
  10. dhrivnak

    dhrivnak Active Member

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    While I completely agree with Chads personally. Most people I find do not look at monthly energy costs. Being an engineer I do not see how but I have hit upon this issue MANY times.
     
  11. Arnold Panz

    Arnold Panz Model Sig 304, VIN 542

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    It's for hybrids, not EVs. A hybrid version of a standard car generally costs thousands more. Therefore, one can calculate, based on the better gas mileage of the hybrid vs. the standard version of the car, and averaging a certain number of miles driven per year, how many years it would take to "make up" the difference between buying the hybrid version of a car instead of the regular version based on the gas savings over that time period. This can be done with, for example, the Toyota Camry, Lexus RX, etc.

    This was a common question when hybrids came out. It doesn't really work for EVs, or even for hybrids (like a Prius) that don't really have a non-hybrid equivalent. You'll notice in the article that they even compare a Volt to a Cruze.
     
  12. zack

    zack Member

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    It would be nice to be able to expand your battery pack as you go, so if you decide you need more range, just buy an expander module like you buy computer memory.
     
  13. Doug_G

    Doug_G Lead Moderator

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    I've pointed out to a few people that you have your monthly payments plus the gasoline. If you remove the gasoline costs then you could afford the more expensive car. They've all "got it".
     
  14. EVNow

    EVNow Active Member

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    #16 EVNow, Jan 11, 2012
    Last edited: Jan 11, 2012
    Focus Hatch is 18,300. FFE is 32,500 (after Tax Cr). At 5% the monthly payments are $345 & $613. The difference is $268.

    At 33 mpg, 1,000 miles a month and $4/gallon, it costs someone only $120. At 2,000 miles a month the difference starts to disappear - but that is very high mileage and brings its own set of questions about battery warranty and durability.

    The quoted comparison - Volt vs Cruze, I'm sure works even worse for Volt.

    This is the reason why people who buy a plug-in buy because they attach a value to it being a plug-in. Just like people who buy a luxury car instead of a Camry.

    BTW, if we do that math comparing Mazda 3 to Leaf 2011, Leaf will actually come out ahead.

    1car-cost-compare.png
     
  15. vfx

    vfx Well-Known Member

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    I thought the Volt Cruze comparison were far because they are different class of cars. Same size, different features.
     
  16. ChadS

    ChadS Petroleum is for sissies

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    The base Focus hatch is not a good comparison for the FFE, which will be their top-of-the-line model completely aside from the powertrain.

    My numbers were lease numbers. After gas savings, there is no difference. Your numbers are purchase numbers; but in addition to not using comparable vehicles, you have not included the higher resale value of the FFE (which is used to set lease rates). Which admittedly doesn't help with the payments, but it does make the TCOs comparable.

    Although as we've all noted, none of this matters because nobody does the math...
     
  17. EVNow

    EVNow Active Member

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    Has Ford announced lease numbers ?

    Interestingly, Volt & Leaf cost the same in terms of leasing. That didn't stop hoards of people from bashing Volt as being too expensive. In general I think people don't look at lease numbers when comparing.
     
  18. ChadS

    ChadS Petroleum is for sissies

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    No. I was speculating based on Leaf & Volt numbers.
     

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