As the electric car market begins to gather steam (or should that be amperes?), it presents a lot of new choices for drivers – not least, how to pay for one of these expensive eco cars. Is battery leasing the answer?
I touched on this when I presented the consumer view on eco cars at the RAC Foundation’s ‘Shades of Green’ event last week.
Put simply, I said most people wouldn’t start switching to eco cars until it will save them money (yes, I know it’s meant to be about saving the planet, but past behaviour suggests most of us are just as keen to save cash).
Right now, with electric cars like the Nissan Leaf costing nearly £26,000 (and that’s after the £5k government grant), there’s no financial incentive to switch. Even when you factor in the ultra-low running costs of using electricity instead of petrol or diesel, it still doesn’t offset the eye-watering purchase price.
And then there’s depreciation to worry about. Nobody knows exactly how electric cars will fare on the second-hand market – it’s too soon to tell. But industry experts CAP and Glass’s have both made predictions, and it’s not great news if you’re buying a Nissan Leaf.
Both trade guides expect the Leaf to retain around £9,500 of its list price after three years and 36,000 miles – between 35 and 37% of the original £26k. And the depreciation gets noticeably steeper after year two, when concerns about needing to replace the battery pack (at the cost of several thousand pounds) will inevitably start preying on second-hand buyers’ minds.
You’ve probably heard of ‘range anxiety’ with electric cars, but I’d say this ‘battery anxiety’ could be just as big an issue. In fact, new research from Glass’s suggests that buying an electric car with the battery included (Nissan Leaf-style) is probably not the way forward. It means buyers of the car (first- or second-hand) face a big financial risk around the longevity of the battery.
Battery leasing could work
So how do you get the second-hand buyers of tomorrow to take a punt on a used electric car? Renault believes the answer is to ask the buyer to lease the expensive battery pack.
By doing this, Renault hopes to be able to sell its forthcoming Fluence electric car for a very competitive £18,000 (after grant). And while the buyer will be expected to pay a monthly fee for battery rental, it will be easily affordable (especially given what you’d save on fuel).
With Renault and Nissan being sister companies, I wouldn’t be too surprised if Nissan moves to battery leasing if it proves successful for the Fluence – watch this space.
I was pretty sceptical about the concept of buying a car and then having to lease the battery, but I think I’m coming round to the idea… Maybe we’ll have to get used to it if we want affordable electric cars.