When buying a car, there's lots of aspects to consider. All of these aspects can be roughly calculated and divided into "cost per mile" which gives a rough idea of what your car will cost in it's life, or as long as you own it.
Electric cars are not always that easy. They are marketed in a way to make you think you will save endless amounts of money on fuel costs, but this is not always true! The biggest cost to electric cars is depreciation, in fact, of the 14 different sectors from Supercars, SUV's, Coupes, and family hatchbacks, Electric cars end up at the bottom of the table retaining just 20% of their original price when new. Given that electric cars are quite expensive anyway, this is a HUGE factor for potential owners assuming they are going to save money on fuel.
Then there's the battery lease itself, of which many manufactures now insist on. For some cars, this is as much as £80 ($107) a month, sometimes less, sometimes more depending on how long you want to keep the car and annual mileage. For those that let you buy the car with the battery, one must consider the cost for replacing this battery after a decade or so. Although battery investment and technology is constantly improving, a replacement for a Renault Fluence is currently worth about £7000 ($9400) which again can make any fuel savings over the years pointless.
Here are some examples I found currently for sale.
A 2012 Renault Fluence with just 20,000 miles on the clock. For sale at £3500 ($4700) it's lost roughly £5000 a year in depreciation, when you factor in the compulsory £80 a month battery lease, it's cost has been £458 a month ($614) or roughly £1.20 a mile! ($1.60) And that's before you've thought about insurance, servicing oh and charging of course.
Another example, the popular Nissan Leaf. A 3 year old example with 32,000 miles for just £4990 ($6686) Nissan charge £103 per month for a 12,000 mile per annum battery lease, and a mid range Leaf costs around £20,000 ($26800) the cost per mile for depreciation/battery lease is better as this example has done more miles in a shorter time, but it still works out at over £6200 a year ($8350) not forgetting if you charge at home, you'll also be paying about £200 ($270) a year in electricity.
The just as popular Renault Zoe, a nice low mileage example just 3 years old with 5500 miles on the clock. The price matches the mileage on this one, just £5500 ($7370) The retail price when new, lets assume the battery is included this time, is £20,500 ($27500) so the poor previous owner of this car lost £2.72 ($3.65) a mile in depreciation alone.
What about a van? Well the popular Kangoo ZE electric van starts at £17298 ($23000) but I spotted an example with 3800 miles on the clock for just £4800 ($6432) a whooping £3.29 ($4.40) per mile before battery leasing costs.
It seems for most models, buying the battery will cost you about an extra £5000 ($6700) which might be a better option, but as you can see, you would be loosing money and lots of it almost immediately! This will of course even out over time, the longer you keep the car, the better in most cases.
So a friendly warning to anyone wanting to adopt this exciting new technology. I'm not trying to scare anyone off, most of us understand electric is the future, but jump on board too early and you could end up a lot worse off.
The good news is that as we all know, the global investment in battery technology will bring the costs down in the future. Perhaps buying a second hand almost new electric car is a wise choice, given the huge initial depreciation, you are likely not to loose anymore on the vehicle itself.
Shop cautiously and be smart and you can pick up a true bargain.
My Mirage took a $5k depreciation hit the first year I owned the car, current fuel cost is $.034 US per mile. $3400 for 100k miles. Insurance is about the same. If I just toss the car in the trash at 100k, that would be $.129 ($12.900 total purchase including all taxes, fees, etc. Works out to 21 cents a mile.
A Leaf with 20k miles depreciates about the same amount I paid for the Mirage.
Most Electric Cars will not be worth the cost of a replacement battery when they need one and the figures previously stated make it perfectly clear I made the right choice, understanding I did not want to keep an old car running with frequent repairs.
Tesla are at the top end of the market and have the best product on the market. They are still pretty fresh and relatively rare so depreciation hasn't really affected them yet. It's more your common run of the mill mass produced cars that are taking the hit, and will continue to do so. Who's going to buy a second hand leaf that can only do 60 miles per charge when the new model can do a tickle over 100? As battery tech continues, the range increases every year or so, making the old models less valuable on the 2nd hand market.
The fast depreciation for plug in cars is a temporary thing. Driven in part by the incentives for buying new. In California and Colorado, the total incentives on a new Leaf is close too or over $10k. That isn't calculated into the new price that depreciation is calculated from, but does driven the price of used cars down.
The PICG (plug in car grant) has just been reduced here by 50%, now £2500 instead of £5000, but the prices quoted are including that anyway. At £5000 a year average depreciation, you could actually buy the UK's cheapest new car every year and afford to scrap it for the same cost!
I considered a plug in hybrid, and would have preferred one if available. I never considered pure electric, but that was due to short range, charge time and rarity of charge points. All these other costs, i think i would have put up with if you could get 500 miles on a charge and plug in overnight at any Travelodge.
The battery lease thing just doesnt sit right at all though.
But nice article Paul!