Jeffrey Jablansky is the very model of a savvy electric-vehicle early adopter. He opted for a Chevrolet Bolt early last year, choosing a vehicle far ahead of all others by his preferred metric: electric range per dollar. But he never considered buying the car; instead, he pays US$220 per month to lease the vehicle.
“I just think in three years I’m going to be delighted at what else is available,” said Jablansky, who writes about cars as a freelance journalist. “And we’re going to laugh one day that we used to plug cars in for eight hours at a time.”
It’s not just that almost nobody is driving electric vehicles right now. Only 1 percent of the global market has gone electric, and the number is even smaller in the US. At this point, years after the first Chevrolet Volt and Nissan Leaf zipped off assembly lines, the market for plug-in vehicles in America is dominated by leases.
Photo: Reuters
DOMINATED BY LEASES
US drivers now lease almost 80 percent of battery electric vehicles and 55 percent of plug-in hybrids, according to Bloomberg New Energy Finance (BNEF). The lease rate for the country’s entire fleet hovers around 30 percent. (There’s one blank spot in the data: Tesla does not divulge how many of its vehicles are leased, and since it sells its cars directly rather than through dealerships, the company doesn’t have to.)
The lopsided consumer preference for leases is fueled by the meager demand for battery-powered vehicles on the used market. Partly this is a consequence of public policy meant to spur electric vehicle adoptions: buyers of pre-owned cars can’t grab thousands of dollars in federal and state incentives.
The high lease rate is also fueled by the bet Jablansky and others like him are making that upcoming models will far exceed today’s in value and capabilities.
“When there’s new technology coming out, and it’s coming out so rapidly, and you’re improving on it so constantly, typically people only want to lease it,” said Steve Center, a vice president of American Honda Motor Co. The hydrogen fuel cell version of the Honda Clarity isn’t available for purchase; it can only be leased.
“Think of your cell phone,” Center explained.
Perhaps electric vehicles will truly arrive when they are no longer compared to smartphones, which become obsolete after three years.
The bet on fast-paced improvements makes sense. In the past five years, battery prices have fallen by an annual average of 20 percent, according to BNEF, as factories scale up and engineers perfect the packaging of cells. “If you look at what can happen across the lifetime of a lease, you’re really talking about doubling the range of these vehicles,” said Edmunds analyst Jeremy Acevedo.
Not surprisingly, a dated plug-in car is a pariah. Electric compact cars that were sold in 2014 are now worth only 23 percent of their original sticker price, compared with 41 percent for comparable combustion vehicles, according to Black Book, an auto analytics firm. A stale Nissan Leaf holds its value about as well as a Florida timeshare.
AGE QUESTION
Part of the problem is that nobody — including auto engineers — really knows how well the first wave of these plug-in cars will age.
“The buyer of a used EV today is as much an early adopter as the buyer of a new EV was in 2011,” said Nicholas Albanese, an analyst with BNEF.
Even that, however, doesn’t explain the depth of the discounting for used electric cars. Tim Fleming, an analyst with Kelley Blue Book, sees hints that buyers who are interested in an electric car also put value on driving the newest thing.
“Let’s put it this way,” he said, “you don’t buy an EV to save money.”
Although you can do just that with a used model — particularly right now. Consider this 2015 Nissan Leaf, with 8,850 kilometers on it. At US$11,995, it sold for less than one-third of its original price and its battery is under warranty until 2023. For perspective, that’s what the average US driver in the average US vehicle spends on gas alone over an eight-year period. The internet is awash in such offers.
There are strong arguments to be made for a secondhand electric car. For one, a used plug-in should be far more reliable than a gas-fueled car because plug-ins have fewer moving parts and aren’t powered by small explosions. Consumer prices for electricity are far more stable than for gasoline, and even older models can have their efficiency enhanced through remote software updates.
Car companies aren’t overly worried about cultivating a secondary market for electric cars, particularly when the market for new models remains so lackluster. Sales of new models are all that matter when it comes to hitting fleetwide efficiency mandates. That’s one of the reasons most automakers are less than forthcoming about the cost of replacing a battery.
“This is a secondary problem for them,” Acevedo said. “All their eggs have kind of fallen in the new-vehicle side of the equation.”
If there is a tipping point in which the electric car market stops behaving like the market for flat-screen televisions, it likely won’t be for two more years. The first Chevy Bolts will come off lease in 2020 — roughly 12,000 of them — and analysts expect those cars still to be capable of going about 320 kilometers on a charge. The market will also start being seeded by a rash of new models: The Tesla Model 3 will be on the road in larger numbers by then, as will the Volkswagen e-Golf and Hyundai Ioniq.
Jablansky has come to love his leased Bolt over the past few months, apart from a few gripes about the thin, squeaky seats. When his lease is up, he might even consider buying it outright. But only if General Motors hasn’t made something far better by then.
A few weeks ago I found myself at a Family Mart talking with the morning shift worker there, who has become my coffee guy. Both of us were in a funk over the “unseasonable” warm weather, a state of mind known as “solastalgia” — distress produced by environmental change. In fact, the weather was not that out of the ordinary in boiling Central Taiwan, and likely cooler than the temperatures we will experience in the near-future. According to the Taiwan Adaptation Platform, between 1957 and 2006, summer lengthened by 27.8 days, while winter shrunk by 29.7 days. Winter is not
Taiwan’s post-World War II architecture, “practical, cheap and temporary,” not to mention “rather forgettable.” This was a characterization recently given by Taiwan-based historian John Ross on his Formosa Files podcast. Yet the 1960s and 1970s were, in fact, the period of Taiwan’s foundational building boom, which, to a great extent, defined the look of Taiwan’s cities, determining the way denizens live today. During this period, functionalist concrete blocks and Chinese nostalgia gave way to new interpretations of modernism, large planned communities and high-rise skyscrapers. It is currently the subject of a new exhibition at the Taipei Fine Arts Museum, Modern
March 25 to March 31 A 56-year-old Wu Li Yu-ke (吳李玉哥) was straightening out her artist son’s piles of drawings when she inadvertently flipped one over, revealing the blank backside of the paper. Absent-mindedly, she picked up a pencil and recalled how she used to sketch embroidery designs for her clothing business. Without clients and budget or labor constraints to worry about, Wu Li drew freely whatever image came to her mind. With much more free time now that her son had found a job, she found herself missing her home village in China, where she
In recent years, Slovakia has been seen as a highly democratic and Western-oriented Central European country. This image was reinforced by the election of the country’s first female president in 2019, efforts to provide extensive assistance to Ukraine and the strengthening of relations with Taiwan, all of which strengthened Slovakia’s position within the European Union. However, the latest developments in the country suggest that the situation is changing rapidly. As such, the presidential elections to be held on March 23 will be an indicator of whether Slovakia remains in the Western sphere of influence or moves eastward, notably towards Russia and