Nissan to lease LEAF battery for $150/month
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.
Gallery: 2010 Nissan Leaf EV
[Source: Le Journal du Dimanche]
Reader Comments (Page 1 of 4)
Alan 12:31PM (9/19/2009)
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.
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polo 11:08PM (9/19/2009)
hey sam abuelsamid, HOW MUCH WERE YOU PAID TO WRITE THIS ATTACK PIECE??
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?
DasBoese 3:53AM (9/20/2009)
@polo
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.
Yanquetino 12:36PM (9/19/2009)
IMHO, this will prove a mistake. Even though it sometimes doesn't make practical or economic sense, Americans prefer to possess... their possessions. There is something about the word "mine" that is paramount in our culture --for good or evil. Yes, owning the battery pack will significantly raise the Leaf's price, but to offset that sticker shock, Nissan might do better in this country to clearly remind customers of the savings in gasoline during the ensuing years.
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Ralph 1:07PM (9/19/2009)
Absolutely agree. Having to lease one of its major components just isn't appealing.
I'd like to see a cost-free, guaranteed buy-back/upgrade option of some sort for the batteries to go with the initial purchase price of the COMPLETE car.
Nick 5:18PM (9/19/2009)
Said who?
More than 50% of Americans in fact lease their cars, and do not own them, more than in western Europe.
contact 11:59AM (9/21/2009)
There will be no savings if you have to pay $27.5k (middle estimate) for the vehicle and THEN have to pay an additional $147/month for the battery which doesn't even include the cost to charge it.
The big draw to EV's is they're cheap to charge and will SAVE you money. This will end up costing an arm and a leg if they do this. $27.5k WITH the battery is reasonable. Otherwise I'll wait in line for an Aptera.
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Dave 1:15PM (9/19/2009)
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.)
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jim 2:43PM (9/19/2009)
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.
Snowdog 3:26PM (9/19/2009)
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.
Chris M 12:37AM (9/20/2009)
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.
Andy 2:53AM (9/20/2009)
Snowdog
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
aimless 1:31PM (9/19/2009)
Sounds a bit like leasing a car including gasoline costs. But you purchase the car and lease the gasoline.
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CaramelZappa 1:37PM (9/19/2009)
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.
jake 1:48PM (9/19/2009)
@CaramelZappa
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.
McHoffa 6:29PM (9/20/2009)
I don't know what you drive but I don't spend $150/month on gas... no way would this be economical to me...
jake 1:41PM (9/19/2009)
I didn't see a price quote for the car in the article, unless I missed it. I don't like leasing as much. For my EV, I want to own the battery. But I can see why they want to do it. Hopefully they have a full price option too, rather than lease only.
This brings to question if the Volt will do something similar as its production volumes increases. It might make the car attainable to more people.
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ev dave 2:49PM (9/19/2009)
Why would you want to pay $12k upfront for a battery that (1) degrades over time, and (2) puts the technological risk on your personal balance sheet? I'd rather lease the battery to save money upfront and leave Nissan to deal with the tech risk.
The truth is that nobody really knows how fast this VERY expensive component will degrade over time, as it's untested in the marketplace.
jake 11:57PM (9/19/2009)
@ev_dave
Yes, I know there are disadvantages to owning the car, but leasing the battery essentially you are being tied on a leash. By end of life, there is no guarantee they will help you switch the battery to a new/better one; they might also have to take back the battery if the lease is not extended or there is no option to extend it. There might actually still be a lot of useful life left in the battery after the lease (usually 5 years) because the batteries being developed today can last more than 10 years/100k miles. Also as mentioned above, it's going to be pretty hard to sell the car in the used car market with an ongoing battery lease. If I own the whole car then there is less ambiguity and I can do whatever I want with the car and the battery. If I wanted to lease, I would have leased the whole car instead, rather than just the battery.
evnow 1:46PM (9/19/2009)
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.
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