• Sep 19th 2009 at 12:24PM
  • 62
2010 Nissan Leaf EV - Click above for high-res image gallery

Aside from the issue of limited range, the biggest problem with electric vehicles in the near term is expected to be cost. Mitsubishi has already announced that the starting price for its diminutive iMiEV in Japan will be approximately $47,000 before incentives and Tesla's Model S will start at $57,000 (before incentives) and likely go up rapidly from there. One of the ideas being floated for reducing the up front cost of EVs is battery leasing. This has a number of potential advantages. The apparent cost of the vehicle is dramatically reduced by taking the single most expensive part out of the sticker price. It also allows the owner to opt for a shorter 3-5 year lease term on the battery and then replace it with a new one, alleviating some of the durability concerns.

Since the cost of electricity is significantly less than gasoline or diesel, if the lease cost of the battery is considered as something akin to paying for liquid fuel the total cost of ownership can be considered somewhat more equivalent. That's exactly what Nissan CEO Carlos Ghosn told French paper Le Journal du Dimanche this week. According to Ghosn, the plan is to lease the battery for the upcoming LEAF EV for roughly €100 ($147 U.S.) per month in addition to the cost of the car which will be in the $25-30,000 range. Still far from inexpensive, but slowly getting there.

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    • 1 Second Ago
      • 6 Years Ago
      There is the problem of non-average drivers. Lease sounds great if you drive 50,000 miles per year. If you drive 5,000 miles per year it sounds very steep, more than the price of gasoline for an efficient gasoline or diesel car. On second thought, putting a lot of miles on an electric vehicle will be next to impossible considering short range and long recharge, but I think there will be enough difference to make some people think twice about a lease.
        • 6 Years Ago
        Leases are structured so that if the mileage at the end of the lease exceeds a certain value, there is a surcharge added on. For a 3 year lease, that limit is likely to be 50,000 miles. Someone driving 50,000 miles a year would put on 150,000 miles by the end of the lease and incur a substantial surcharge. On the other hand, the typical driver putting on j15,000 miles a year or less would not incur a surcharge.
        • 6 Years Ago
        A lease is never "a promise to pay whatever the lessor decides" after the fact, the terms are straightforward and unambiguous and agreed to before the leasee signs. Part of any auto lease is a mileage surcharge that is applied only if there is excessive mileage on the car at the end of the lease. The leasee can easily avoid that charge by exercising some restraint and not exceeding that mileage amount, and the car has a helpful little device called an "odometer" that can assist with that task.

        The surcharge is a per mile charge for every mile over the mileage limit and is stated in the lease, so if the leaseee exceeds the mileage limit, the leasee can figure out what that surcharge will be.

        Hiring a lawyer to review an auto lease agreement ahead of time would just be a waste of money, in my humble opinion. If a lease agreement isn't clear and unambiguous, I'd just take my business elsewhere.
        • 6 Years Ago
        That approach to a lease is one of the things that people hate. Signing a contract for something so open ended raises suspicions of anyone who has dealt with a business entity. A promise to pay whatever the lessor decides is pretty one sided and who wants to hire a lawyer to review the agreement ahead of time.
      • 6 Years Ago
      I think the best thing for them to do is offer the car both ways. Allow people the option to either buy the battery or lease, then they can choose their own preferred path. As pointed out above some poeple will prefer to own, some to lease. Some people that will actually anylyze the best choice for themselves can do and the results will vary with their expected use of the car. With a 10 mile daily commute you could lease, with a 100 mile round trip commute would lease.

      I expect that more in the US would choose th epurchase while more in Europe would lease although a rational analysis might lead to the opposite, but americans i think are more likely to want to own it.
      • 6 Years Ago
      The battery leasing idea only works if they are going to lower the price of the car.

      If they don't, this vehicle is going to be an enormous failure and give the reputation of EVs another serious black eye.
        • 6 Years Ago
        The battery leasing idea will not work if the car sells for an initial price of $25,000 - $30,000. Period. It will only work if they can significantly lower the initial price.

        And why is Nissan having a change of heart?

        From Witzenburg's post on 8/14 ( http://green.autoblog.com/2009/08/14/at-witz-end-turning-over-a-new-nissan-leaf/):

        While pricing has not been announced, [Nissan North America Product Planning Vice President Larry]Dominique says it will compete with "well-equipped C-segment vehicles" in the $25-33,000 range. Asked whether that price will include the 48-module laminated li-ion battery (instead of the battery being leased separately), he hints that it will. "We want our customers to have just one payment," he says.

        Our sources (including Honda R&D) indicate that li-ion batteries today typically cost $1,000 or more per kWh, and the near-term target is $500-800/kWh. But Dominique suggests that Nissan will pay much less for LEAF's high-power, high-energy laminated li-ion pack. "At $500 per kWh, my battery would cost $12,000," he tells us. "It will be a lot less than that."
        • 6 Years Ago
        Of course, but with the batteries being a major portion of the cost of an EV, taking the battery out of the purchase cost dramatically cuts pricing, and it could even end up cheaper than a similarly sized gasser. That could certainly boost sales.
      • 6 Years Ago
      First this is for European market. They may or may not follow the strategy here.

      Second, this is for Renault - not Nissan. He doesn't meantion Leaf anywhere.

      Anyway, personally I like the idea of leasing the battery. A brand new rapidly evolving technology is ideal for leasing.
      • 6 Years Ago
      Sounds a bit like leasing a car including gasoline costs. But you purchase the car and lease the gasoline.
        • 6 Years Ago
        Well, more like buying the car and leasing the gas tank. The batteries only hold energy, you still have to fill the car up with electricity from your hone.
        • 6 Years Ago
        Doesn't seem like that good of an analogy in terms of price, because a gas tank usually is very inexpensive. If you combine the costs of the battery and costs of electricity into one ongoing cost, the cost will be similar to gasoline.

        It really is an idea that might work out. The lease part might put off some people (like me), but most Americans care more about sticker price, they aren't as good at figuring out ongoing costs and factoring that into the buying decision. This leasing idea takes the biggest disadvantage of an EV (expensive upfront costs) and turns it into an ongoing cost, which makes the car very comparable to an equivalent gasoline car.
        • 6 Years Ago
        I don't know what you drive but I don't spend $150/month on gas... no way would this be economical to me...
      • 6 Years Ago

      The electricity to charge the battery for a 100 mile drive is ~$1-2.50, so add $180-450? Personally, I'm drive ~36,000 miles per year (commuting 95 miles round trip) so my costs would be less than for gasoline.

      If the car costs $25K plus the battery lease, that does seem a bit high.

      Sincerely, Neil
      • 6 Years Ago
      Something that I think people are going to have to get used to as we move towards major automakers selling EVs, is that the cars are going to cost more to buy than their gas-burning predecessors, because the automakers and dealers can't make the money they now make on replacement parts and service. The buyer wins in the long run with reduced maintenance/fuel costs, and we ALL win by breathing cleaner air, not to mention the trillions of dollars the petroleum economy has cost us in other ways, but it will require a paradigm-shift in our thinking to get there.
      • 6 Years Ago
      it would be interesting to see the internal market data / feedback that TH!NK got as to its batt lease idea / plan

      i would imagine most buyers just look at the unit price plus a few years of monthly batt lease payments
      • 6 Years Ago
      NiMH is the past. It's mature but only $0.50/Wh, the same price most automakers are paying for li-ion, which isn't yet mature (and thus still has a long way for its price to fall). It's also inefficient, has significant self discharge, poor performance in non-optimal temperatures, and has notably poorer energy and power density. And it's more toxic and relies on rarer raw materials.

      The 1990s ZEV-spawned EVs were significantly price-subsidized by the auto manufacturers.

      • 6 Years Ago
      I haven't read ANY of the comments, I just registered to say that

      U Yankees´paranoia about leasing a-n-y-t-h-i-n-g ,
      is leading to warped logic and conclusions.

      Thank you very much for reading my comment.

      I'm convinced you all agree.
        • 6 Years Ago
        "Us Yankees" aren't nearly as paranoid about leasing as you seem to think. As another poster pointed out, about 50% of new cars were leased in the US. The percentage of leases has dropped recently, not because of "paranoia" but because the lease companies lost a bundle when leased SUVs depreciated far more than expected, causing major financial losses. As a result, the lease companies now refuse to lease large gas guzzlers, and will only lease vehicles known to hold their value, like hybrids.
      • 6 Years Ago
      Is that really the best they can do when they're making their own batteries? I hope they'll be enough competition by 2011 to get the costs down.
        • 6 Years Ago

        1) The article doesn't even mention the word "LEAF"

        2) The article only talks about RENAULT's plans for their electric cars.

        You completely ignored what was in the article and made up that headline and story. NOWHERE IN THE ARTICLE DOES IT REFER TO U.S. PLANS OR MENTION THE "LEAF". I guess you thought we were all so stupid we wouldn't actually read the source article?
        • 6 Years Ago
        Where in the article does he attack Nissan? Yeah, it's practically overflowing with aggression and vitriol, highlighting potential advantages of a leasing approach and all.

        Secondly, Renault practically owns Nissan, with Ghosn as CEO of both.
      • 6 Years Ago
      If theyre gonna lease the battery, its seems that they might as well just lease the entire car.

      OTOH -
      1) The battery's range diminishes over time, so a fresh battery every 3-5 years might not be so bad.
      2) The replacement battery that is available in 3-5 years will most probably be cheaper and/or have a longer range.

      (Not that the Leaf will make financial sense anyway.)
        • 6 Years Ago

        Who wants to "buy" a used car with a permanent $150/month payment after they buy it.

        Only everyone who buys a gasoline engine car
        • 6 Years Ago
        When mainstream EVs starting hitting the used market, a major consideration in the resale value will be how much usable life is left in the battery and what will a new one cost. Leasing eliminates remaining battery life as a value consideration.
        • 6 Years Ago
        Snowdog: there are on occasion "lease transfer sales", where the buyer effectively takes over the remaining lease, it could be a good deal if the remaining lease payments are less than the "fair market value" of the used vehicle. So a sale of an EV with a leased battery could be economically feasible, though it would be a bit more complex than a simple used vehicle sale, with a transfer of lease in addition to transfer of title.
        • 6 Years Ago
        Leasing the battery might also eliminate any hope of a used sale.

        Who wants to "buy" a used car with a permanent $150/month payment after they buy it.
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