Leasing the battery – Best thing since … ?

Ever since Nissan Leaf was announced back in May, one issue that has been much discussed is whether Nissan is going to sell or lease the battery. We have an answer now.

nissan-ev-battery-pack-48-modules-4-lion-laminate-cells-each

Nissan launched their 22-city nationwide tour of Leaf in LA on the 13th  and CEO Carl Ghosn’s comment gives us the answer.

Because the Leaf’s batteries will be leased, Ghosn said, the Leaf will cost almost exactly the same as a similar gasoline-powered vehicle.

There are a lot of people who post on the internet saying they are dead set against leasing the battery. I find it difficult to figure out why leasing the battery is bad. Are they worried about EV1 style recall and crush or are they have bought too much into the “ownership” society that ironically has the largest debt in the world ? Are they worried whether they can get the federal rebate if the battery is leased – I guess Nissan has figured that out by now. 

Currently Nissan’s battery is holds 24kwh of energy and will propel the car a 100 miles on a full charge. The batteries are for all practical purposes use a first generation technology. The technology is evolving rapidly and no doubt the the future generations will be cheaper, smaller and better. They will hold more energy and thus give better range. They will also be safer.

Given this, why would anyone want to buy a battery which will degrade slowly with usage ? The battery will only hold 80% of the charge after 5 years. With highway driving that would probably result in 50 to 60 miles of range.

Instead, if leased, Nissan is in charge of the battery. They will replace it when it is time – or may be we can buy it in 5 years when we will have 3rd gen battery which would cost half the current estimated $10,000 and/or hold more energy.

That is why I think the idea of leasing the battery is the best thing since …. well the idea of Nissan Leaf itself.

Ofcourse one problem might be the cost of lease. Nissan has not given the monthly lease figures – but Ghosn, has given enough information for us to calculate a rough figure.

For someone who drives between 12,000 and 15,000 miles a year, buying the Leaf and leasing the battery will be cheaper than owning a similar gas-powered car and filling up with liquid fuel.

Let us assume a gas price of $2.50 to $3.00 per gallon. Let us also assume a mileage of 25 miles/gallon.  Then we get a figure of $100 on the low side for the cost of filling up the car and $150 on the high side. In a September interview Ghosn actually quoted 100 Euros as the lease for the Renault EV – which translates to about $150. So, I think we are in the right ballpark here.

Taking what Ghosn is saying about the cost of the battery being same as the gas we need in a month, I expect the battery to be leased for $100 to $150 a month and the car to cost some $25,000 to $30,000 before rebates. I’d pay that much for a battery lease in a heart beat.

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~ by evnow on November 15, 2009.

One Response to “Leasing the battery – Best thing since … ?”

  1. It is not that leasing the battery is “bad.” It is simply that, in the American culture, for good or evil, possessors prefer to possess their possessions. Whether or not it makes practical or even economic sense. Yes, it is much easier, and probably cheaper to swap a “leased” battery when better, more powerful, longer lasting models become available. But most Americans would prefer to “trade in” their old battery for the new one, even if they lose money on the deal. You’d probably have more luck getting blood out of a Jehovah’s Witness than convincing many Americans to merely lease rather than own every single component of their automobiles. Go figure.

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