LEAF still winning the lease battle
When Nissan started production of the LEAF in Smyrna, Tennessee for the first time, potential electric vehicle (EV) owners smiled. Not only would this innovative product be built by Americans, but producing the LEAF in the U.S. would introduce a lower price model (the LEAF S – $29,650 including destination), while also reducing the price of the existing trim levels – the SV and the SL. It seems that this price reduction is now being mirrored by domestic EV producers.
For the 2014 model year, the Chevrolet Volt will be reduced in price to $34,995 including destination charges. The 2013 Volt starts from $39,995, including destination fee. GM hopes to see this $5,000 reduction result in increased demand as the feature set has not been changed for 2014.
Ford will also reduce the price of the 2014 Focus Electric. The 2014 Ford Focus Electric will sell for $35,995 including destination fee. This is a $4,000 reduction from the $39,995 2013 model year price. Ford also elected to not de-content the vehicle.
While the price reductions are useful for EV consumers, the real battle is still Nissan’s to lose. Nissan continues the offer of a $199 per month lease on the Model S for 36 months. Nissan is extending this offer on a month-to-month basis, likely until they see see demand improving organically. Chevrolet has not yet released leasing costs for the 2014 model, but the 2013 Volt can currently be leased for $269 per month for a 36 month lease. The 2014 model will be available late summer according to Chevrolet.
Ford apparently does not feel the need to entice their customers nearly as sweetly. With the 2014 Focus Electric price reduction the 36 month lease is $308 per month for 36 months.
All of these lease terms are for 12,000 miles per year although all have varying drive off costs. Ford requires $953 due at signing, Nissan – $1,999, and Chevrolet – $2,399.
We still see leasing as the best option of acquiring an EV, having fought the notion for our first LEAF purchase, but giving in for our second LEAF acquisition. Our reasons are simple – technology is improving, causing existing technology to depreciate faster than normal compared to a conventional ICE (internal combustion engine) car. As importantly, no one really knows how long the batteries will provide a reliable range. We have seen that driving style, charging performance, and climate can impact battery life. By leasing the vehicle (whichever vehicle you choose), you are placing the burden of battery replacement upon the manufacturer upon lease termination. Should you see that your battery is holding up well in your situation, you can opt to purchase the vehicle at end of lease.
We look forward to additional improvements and price reductions by all manufacturers, making EVs viable for a greater percentage of the population.