January 8, 2018
A recent Bloomberg report found that most people who are driving around in electric vehicles are choosing to lease them. In fact, nearly 80 percent of all electric vehicles in the United States are under lease contracts instead of car loans. The report also found that about 55 percent of plug-in hybrid vehicles are also leased.
When it comes to the global market, only about 1 percent of it has embraced electric vehicles. The percentage is even smaller in the United States. In this automobile category, leasing is the smart thing to do because it makes it easy for drivers to trade up for new models every two or three years as technology advances.
Jeffrey Jablansky, the owner of a Chevy Bolt, said, “I just think in three years, I’m going to be delighted at what else is available.” For instance, it's likely that in the future, those who buy electric cars won't have to plug them in for eight hours to keep them charged.
Betting that fast-paced improvements will reach the electric car market is a good one. During the last five years, the cost of batteries has fallen by an annual average of around 20 percent with manufacturers scaling up and engineers improving the packaging of battery cells. When you consider how quickly technology is changing batteries, the range of electric vehicles could wind up being double what they are now by the end of a regular vehicle lease.
Depending on the car make and model, monthly leases can be quite affordable. For instance, consumers can lease a zippy Fiat 500e for around $182 a month. For those who prefer a more luxurious ride, the BMW 530e can be leased for about $600 a month.
Electric compact cars from 2014 are now worth just 23 percent of what they were selling for initially, while comparable combustion-powered vehicles are worth 41 percent of their original value. One problem is that no one can predict how well the first round of plug-in cars will age.
Since there are more people leasing electric cars than buying them, money savvy consumers can pick up a used one for a good deal. In fact, they generally sell for far less than secondhand vehicles that operate on gas. Those who buy them used won’t be eligible for the $7,500 federal tax credit that you get when you purchase a new electric vehicle, but they are being sold for a fraction of the initial sticker price.
With carmakers starting to embrace electric technology, the future of electric automobiles is bright, even with people leasing them instead of buying them. This is not only good for the pocketbooks of drivers, but it is also good for the planet.