Battery leasing schemes key to pushing electric vehicles into the mainstream

Battery leasing schemes key to pushing electric vehicles into the mainstream


Shoreham Vehicle Auctions has voiced concerns over the lack of battery leasing options for electric vehicles (EVs), maintaining that the uptake of EVs would be greatly accelerated if more hire schemes were available.

Sales of new EVs are up 246% compared to this time last year, aided by continuing government support and grants, improvements in vehicle range and a growing network of charging infrastructure.

However, car dealers feel there is one major barrier remaining before EVs will be accepted into the mainstream. That is the anxiety surrounding their low resale value, coupled with high battery replacement costs.

A proposed solution to this is to remove the battery from the vehicle cost and lease it separately. This would have several benefits: it would wave concerns over depleting battery life, lower the initial costs of an EV, and improve the prospective resale value of a used EV; in turn, bettering residual valuations from leasing companies.

As with any battery, an electric cars battery’s charge storage capacity lessens over time. The cost of replacing a battery can be as expensive as buying a used EV in the first place. This is why dealers are currently reluctant to stock used electric cars, wary of upsetting customers and damaging reputations.

In response to customer feedback, Nissan decided recently to reduce the price of a new 24kWh replacement battery pack for a Nissan LEAF to around £3500, yet this still does not provide the flexibility and assurance that a leasing option would.

Renault is currently one of the few manufacturers to lease the battery to EV owners, rather than including it in the initial price of the vehicle. A Renault Zoe, for example, costs £13,833 (including the plug-in car grant) and then an additional £70/month to lease the battery. The monthly costs are still lower than what many pay for petrol/diesel and vehicle costs are not only affordable, but competitive within the small car sector. Renault also place a guarantee on battery performance, saying if it falls below 75% of the initial capacity it will be repaired or replaced.

Alex Wright, Managing Director of Shoreham Vehicle Auctions, said:

“Residual Values are based on market confidence and by introducing flexible and affordable battery lease schemes in line with the price bracket of the vehicle on the forecourt, we believe manufacturers will protect residual values and gain the final thread of confidence to make EVs a long-term success in this country”

“The new electric car market is growing, but manufacturers must look to when these cars move into the second hand market and if they look after the needs of the used car buyer of seven to 10 year old models, then the longer term needs of buyers of three to five year old cars will look after themselves.”

Tesla Motors, who are continually pushing the envelope on EV technology , recently demonstrated a battery swapping station that has the potential to be a game changer. This would incorporate the benefits of battery leasing, in addition to increasing convenience for EV drivers by taking away the time it takes to recharge. The video below shows that, in the time it takes to refuel to conventional vehicle with petrol, two Model S’ can have their batteries replaced, regaining a full charge. It is rumored that Tesla’s first battery swapping station will be launched later in 2014. Further details on pricing have yet to be discussed, though.

Shoreham Vehicle Auctions, Treehugger, Renault, Torque News