Three Out of Four Electric Cars Are Leased, Not Purchased
Almost three out of four electric cars on the road are leased — not purchased — according to data from Edmunds, which was compiled by CNBC. (The leasing data excludes Tesla, who does not report leasing rates.)
The overall lease penetration rate for electric cars, which is 74.9 percent, is much higher than the overall rate for all cars, which is 28 percent. The leasing rate for luxury cars is roughly 50 percent, according to Edmunds.
According to the report, EV drivers are more likely to be early adopters but are hesitant to own the vehicles due to increasing battery capacity and rapidly evolving technology. In other words, electric cars are becoming the new iPhones.
Residual and resale value continue to be a hurdle for many electric cars, prompting new owners to opt for leases rather than pay out of pocket.
“Typically, you would have about 40 to 50 percent retention from three years after vehicle is new. EVs are only at 25 to 30 percent retention from their original price, even after factoring in the $7,500 federal incentive,” Anil Goyal, vice president of automotive valuation and analytics at Black Book, told CNBC.
According to the report, leasing penetration rates for electric cars peaked in 2013 at 84.3 percent. In 2015, 74.9 percent of new electric vehicle owners leased their cars.
Estimates peg Tesla’s lease rate at around 40 percent for their cars — above the overall rate, but still below the average rate for electric cars. Tesla announced last year it would make available its cars for lease through U.S. Bank, which has increased interest, but it’s still hard to tell how prevalent leasing is through Tesla.
(Even used Teslas could be a bubble waiting to burst.)
Federal rebates for EV cars go to the owners — even if the car is leased — although state rebates vary.
More by Aaron Cole
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We have a friend who's owned a succession of MINI's but just got into an electric Fiat 500e. Two grand and down and $169/mo, walk away after 36 months, that's a pretty screaming deal if you like the 500 and want to try an EV. Of course, that doesn't include a charger, and, at 24 hours to fully charge the battery on 120V, you'll want one, unless your commute is really short. And at 3 grand installed, there goes your screaming deal.
EV proponents are harsh critics of automakers as they believe that the continued dominance of the ICE is all a huge conspiracy by "big oil" and automakers. The more you dig into the details and learn all of the drawbacks of EV's, it's perfectly logical that they haven't taken over. That is not to say they have no merit or that we won't have mass adoption of EV's someday, but with today's available tech it makes no sense. Tesla proved nothing -- that you can build an uber sedan with laptop batteries that has half the range of an ICE uber sedan? It's a lot harder to build a competitive car in the mainstream of the market for a small profit than a super premium toy for the rich that they lose money on (because Wall Street is funding the whole venture at a huge loss hoping it scales up and takes over the market). This will all take years to play out. Tesla and it's Wall Street investors are hoping for a big battery breakthrough or that they can convince enough people to change their expectations on range and refueling in order to supposedly save the planet.