Economists and automotive pundits seems to be split on leasing. The general consensus is that if you change vehicles often, leasing is a good deal. the other side of that coin is that after your lease ends you’re left with nothing. The vehicle goes away and you have to start all over. There are both valid considerations, but for me, it comes down to one giant consideration, battery technology. Recently we put our hard-earned cash (well my wife actually works, I’m a journalist, which is like getting paid for a series of homework assignments) into leasing the 2022 Hyundai Kona Electric. It has 258 miles of range, supports charging up to 100kW, and has room for our two dogs and probably additional humans, but the dogs are really the important ones here. It checks all the marks we need for our transportation needs. But, in three years it’ll be returned to Hyundai and we’re totally fine with that and that’s because, in three years, the world of battery technology might be different. Or at least, better.
A Leaf on the Wind
Unlike gas engines which have progressed over decades and their pace of change has slowed, EVs will continue to evolve at a rapid pace. If you’re even sort of paying attention to the electric vehicle world, you’re already seen advances in battery and motor technology. One quick way to see how things have advanced in the past 10 years is to take a look at one of the longest-selling EVs currently on the road, the Nissan Leaf. In 2010, the first-generation version of the EV had an EPA-rated range of 73 miles, which today seems laughably low because we all know in the real world, that translates to about 60 miles of range. Then for the model year 2016 Leaf, Nissan had increased that range to a whopping 83 miles, according to the EPA. Then for 2017, the second-generation Leaf was brought to market with 117 miles of range. Two years later, the 2019 Leaf Plus was introduced with a range of 226 miles. As time progressed, the capacity of the battery pack increased, as you would expect, but the overall size of the pack essentially stayed the same. According to Nissan, the latest version of the vehicle offers 67% more energy density than the 2010 model. In other words, within the same amount of space, the battery has 67% more energy with which it can roll you down the road.
Considering the Battery
This type of innovation over time has led to some tough realities for those that have purchased EVs. The residual rates for essentially every EV that doesn’t have a Tesla badge are below that of comparable gas vehicles. There are a lot of factors that come into play with these calculations, but the range is a consideration. The higher the range the better off the vehicle’s value after three years. So, sure, the 2022 Kona Electric has great range now, but in three years? Who knows if 258 miles is something that’ll be the norm on regular consumer EVs. Lucid, Tesla, and Mercedes already are breaking the 400-mile range and that will likely trickle down to cars the rest of us can afford at some point in the future. Plus, there’s battery degradation. Like the smartphone in your pocket, the batteries in EVs lose capacity and, in this case, range over time. It’s just the nature of current battery technology. What speeds that up is fast charging and charging above 80%, which is why most automakers recommend you only charge your EV to about 80% and charge at home instead of at DC fast-charging stations on a regular basis. We won’t willfully aim to degrade the capacity of the Kona’s battery pack. It’s more convenient to charge at home and there’s really no reason for 95% of our driving to top off the battery to 100%. But, situations change. What if we end up using the vehicle for more road trips than we anticipated? That’s really where DC fast charging and pushing the state of charge to 100 makes sense. If that happens, at the end of three years if the vehicle only has 200 miles of range, that’s Hyundai’s problem, not mine.
Price Matters
It’s also cheaper to lease than buy. That’s important because EVs are still more expensive than their gas counterparts. Over time, thanks to less maintenance and a lower cost of actually running the thing, owning an EV might be cheaper. Plus, that $7,500 federal tax incentive when you buy is just that, a tax incentive. You don’t get $7,500 off the cost of an EV when you drive it off the lot. You get that money at the end of the year. For our lease, I made sure that credit was applied to the cost of the vehicle and it lowered our monthly payments. In other words, it made the vehicle cheaper from the get-go instead of getting money later on. Finally, there are a lot of new EVs on the horizon I’m truly excited about. For example, every time I see the Volkswagen I.D. Buzz concept van at an auto show, or even just a glimpse of a photo or rendering of the microbus, it gets me awkwardly excited. I can live the van life dream without accelerating the destruction of the places I want to go in a van. But it won’t be in the United States until 2023.
Not Easy Being Green
So we took the plunge knowing that the technology (as it usually does) will get better. For us, buying another gas car seemed irresponsible. We live in California and each year the state is further engulfed in flames. While we’re trying to reduce our impact on the planet, it’s also important to figure out how to reduce our impact on our bank accounts in the long run. Being green also means being smart about what works best for you and for us. We’re looking towards the future to see what’s next while adopting what’s available now, based on what we can afford right now. EVs could be cheaper in three years, they could have more range in three years, they could be awesome vans that make you a neighborhood hero. Whatever the future holds, though, we’ve got three years to watch, wait, and get ready for what’s next while still being greener now. Want to know more about EVs? We have a whole section dedicated to electric vehicles!
