how well will the leaf hold its value?

[mdh]

My leaf will be arriving in a few weeks... all of a sudden i am worried that this car will be hard to sell in a few years due to other EV/plug-in IC hitting the market with better range, etc.

This article made me nervous.

Any thoughts?

http://www.autoevolution.com/news/ev-depreciation-rate-21772.html

 

[GaslessInSeattle]

When I read stuff like this it makes me wonder if the author is deliberately trying to create worry. You can make a lot of predictions of depreciation but saying anything near 100% depreciation over 5 years sounds so outlandish that it makes the whole article sound suspect.

I figure the federal tax credits, zero sales tax and free EV project charger help reduce some of the financial risk. Add in also the $2Kish I'm saving a year on fuel and I think you can make a good argument for the purchase of the Leaf being one of the best investment in an automobile I've ever made and that's not including the value of how it's lifting my spirits about the prospects of the future of the planet

I did worry about this at first, wondering what would happen when a battery came out with a better capacity, back when I was fixated on battery capacity. Now that I've been doing 80-90% of my driving over the last 4,000 miles with the Leaf and not even coming close to running out of juice for in city driving, other than poor planning, I realize that maybe capacity really isn't such a defining characteristic. I could do with quite a bit less so the prospects of degradation don't worry me much, assuming it's not catastrophic, which is what the warranty would be for. And once the charging network is in place, I would be able to get a car with less capacity and be fine. Actually, I think once people get through the transition of range anxiety, there will be a decent market for EV's that have a smaller range than the Leaf. Surely the car will depreciate, but I suspect it's going to be coveted and quite valuable for some time to come, I'm quite optimistic that I will be able to sell it when I want to and eventually those tax breaks are going to run out, probably boosting the resale value of the first generations. More than likely though, what will happen next for me is not selling the leaf for a car with a bigger battery but instead selling my ICE for a long distance EV, say with a 300 mile pack, at some point down the road. The only thing the Leaf doesn't do for me now, is go the occasional 500-600 miles in a day.

I'd say don't get discouraged by the nay sayers, people love to speculate and be harsh about something so new.
g

 

[Nekota]

Cars are seldom an investment opportunity so consider them a cost aversion by displacing fuel cost with electric cost. If your electric rate is low enough and the cost of fuel is high enough, the car will pay for itself with the cost savings. For my case I replace a 18 mpg vehicle at $330/month for gas with $30/month of electricity for a $300/month savings or $3600/year savings with gas at $3.80 per gallon. It takes 10 years to save $36K and replacing the battery for $18K (probably less than that in 10 years) you will have a car that will operate nearly as a new one for another 10 years.

 

[mdh]

thank you for your thoughtful response. Very kind of you... i am worried that the plug in prius (out in April, 2012) will really hurt the resale value of the Leaf, rather fast. I am thinking of buying the leaf, rather than lease. the nissan leaf lease basically shows the car only having something like a $15K resale value in 3 years... crazy? I will need to pay the tax here in California, but we do get a $2500 rebate. My alternative is to wait for the plug in prius as the 13-15 mile range is not too bad for me.

Last, I wonder if Nissan will offer any range extending options for the current 2011 down the road?

When I read stuff like this it makes me wonder if the author is deliberately trying to create worry. You can make a lot of predictions of depreciation but saying anything near 100% depreciation over 5 years sounds so outlandish that it makes the whole article sound suspect.

I figure the federal tax credits, zero sales tax and free EV project charger help reduce some of the financial risk. Add in also the $2Kish I'm saving a year on fuel and I think you can make a good argument for the purchase of the Leaf being one of the best investment in an automobile I've ever made and that's not including the value of how it's lifting my spirits about the prospects of the future of the planet

I did worry about this at first, wondering what would happen when a battery came out with a better capacity, back when I was fixated on battery capacity. Now that I've been doing 80-90% of my driving over the last 4,000 miles with the Leaf and not even coming close to running out of juice for in city driving, other than poor planning, I realize that maybe capacity really isn't such a defining characteristic. I could do with quite a bit less so the prospects of degradation don't worry me much, assuming it's not catastrophic, which is what the warranty would be for. And once the charging network is in place, I would be able to get a car with less capacity and be fine. Actually, I think once people get through the transition of range anxiety, there will be a decent market for EV's that have a smaller range than the Leaf. Surely the car will depreciate, but I suspect it's going to be coveted and quite valuable for some time to come, I'm quite optimistic that I will be able to sell it when I want to and eventually those tax breaks are going to run out, probably boosting the resale value of the first generations. More than likely though, what will happen next for me is not selling the leaf for a car with a bigger battery but instead selling my ICE for a long distance EV, say with a 300 mile pack, at some point down the road. The only thing the Leaf doesn't do for me now, is go the occasional 500-600 miles in a day.

I'd say don't get discouraged by the nay sayers, people love to speculate and be harsh about something so new.
g

 

[surfingslovak]

When I read stuff like this it makes me wonder if the author is deliberately trying to create worry. You can make a lot of predictions of depreciation but saying anything near 100% depreciation over 5 years sounds so outlandish that it makes the whole article sound suspect.

Here's an excerpt from the author's profile page, which likely uses his own words:

Daniel is the one in our team who loves to push buttons. Not the ones you have in your home, or car, or wherever, but the ones who make us huff and puff. He hates all electric vehicles and is a sucker for American muscle cars.

 

[Herm]

"The first generation EVs will, most likely, not create a used market of their own. Once you buy a 2010-2011 Nissan Leaf, you'll be stuck with it for life. The main reason a used EV market is unlikely to be born is the fact that the manufacturing price for the battery packs needs to stabilize. For as long as there is room for that price to go down, there's no way someone could sell an used EV and be happy with the money they've made."

He may have a point, how do you sell a used Leaf if you cant certify the life left in the battery?.. and the recent talk about 5 years of life from a Nissan manager does not help. The thing that worries me is that Nissan knows exactly what condition the battery is in at all times, and they can closely predict how long it will last under your conditions.. yet they are being coy about it. There should be a page in the energy display that tells you what the expected life is in both miles and years, based on your history.

 

[ERG4ALL]

We decided to lease our LEAF for 39 months. It saves us at least $200 per month in gas, not to mention oil changes, filter changes, etc. The other fact is that even if you buy an ICE you will be facing depreciation for a $35,000 car of over $300 per month ($35,000 less $5,000 trade in at 8 years, divided by 96 months). Thus, for the LEAF over the eight year life the opportunity cost is $500 per month (versus owning an ICE) or $48,000 and at that point one shouldn't care if the trade in value of the LEAF is zero.

An 8 year life seems reasonable based on the battery warranty and the useful life of an ICE. Given those assumptions, the break even seems to be about four and one half years if you purchase the LEAF ($35,000 less $7,500 divided by $500 per month and all divided by 12 months in a year). We decided to lease even if it costs a little more because where we live we could use the extra mileage improved batteries will make in a few years.

 

[OrientExpress]

We have leased our 2011 Leaf.

The main reason that we leased this car, is that it is a V1.0 product. (The second being the excellent financials which allow us to drive the car essentially for free for 39 months)

Having been in the Consumer electronics business for over 30 years, I know that V1.0 products are almost always compromise products (schedule, technology, cost, etc.), and that follow on versions (if the product is popular enough to warrant follow-on versions) are always superior in every way. A perfect example of this is the iPhone, the best selling smartphone in the world. No one even remembers the V1.0 of that phone, which did not even support 3G data services. It has been just 4 years since its release and the V1.0 phone is essentially worthless except for its raw materials.

So it will be for the V1.0 Leaf. At the end of our 39 month lease in the summer of 2015, we expect that the Leaf will be on Version 3, and that there will be at least 10-15 worthy competitors in the EV space with costs on par or less than the V1.0 cost but with at least double the range, and other advancements that will make the V1.0 Leaf seem quaint. A good example of this is that even though the Leaf has only been on the market for about 9 months, the car is already on V1.3.

In 4 years, I see the V1.0 Leaf (and Volt) having a residual of something like 15~25%, vs. 4 year old ICE vehicles which have a 30 ~50% residual value.

Now I know that this assessment is harsh, especially for those of you that decided to purchase, but I would say just enjoy the car for as long as you want. Despite its V1.0 status, it is an extremely good first attempt, and I expect future versions to be even better.

 

[Reddy]

Interesting topic. I remember when the Prius came out there were similar hit pieces written about the value not holding up. I just checked and blue book for a 2007 Prius is currently $15-18K. Doesn't sound like they dropped like a rock as predicted. I don't see many used ones for sale around here and they are always similar (say 50-75% of MSRP). These articles assume that technology will move as fast as computer/electronics and everyone will want the "next" version. That isn't the case. Many of us will be happy with version 1.0 and there are plenty of other folks out there who won't be able to afford 2.0, 3.0, etc. so will gladly by 1.0 for 50% MSRP.

Don't worry about it. Like others have said, you don't buy a car to make money, you buy it to use. If you are really interested in the lowest cost transportation, try walking first, bicycling second, public transportation, bumming rides/hitchiking, mopeds, used motorcycles, used cars, etc. Yes, future EVs will likely have better range, components, accessories, colors (yes, we need to start a new thread on the lack of decent Leaf colors), but how long are you willing to wait? I would like there will be 480V DC QC along the freeway and 200 mile batteries in five years. However, realistically we will probably only see 150 mile batteries and scattered charging stations at best. Here's to hoping for the best!

Reddy........and still waiting for my Nissan Leaf sometime in August

 

[Reddy]

We have leased our 2011 Leaf.

......In 4 years, I see the V1.0 Leaf (and Volt) having a residual of something like 15~25%, vs. 4 year old ICE vehicles which have a 30 ~50% residual value.....

I agree with your other points, except this one. I predict it will be closer to the other way around, perhaps greater than 50% for the Leaf and less than 50% for the ICE (if everyone starts to realize how good EVs are). The batteries will do better than we think (unless you really abuse them by year-round constant QC or 100% charges at over 100 degrees). That said, I would be hesitant buying a used Leaf from Arizona!

Reddy.........and still waiting for my Nissan Leaf sometime in August

 

[Stanton]

We have leased our 2011 Leaf.

The main reason that we leased this car, is that it is a V1.0 product. (The second being the excellent financials which allow us to drive the car essentially for free for 39 months)

But here's the thing that potentially changes the entire argument: I don't think the Leaf really IS a v1.0 product. Yes, this is the initial version of the car sold commercially, but many of the systems--not the least of which the battery pack--are either proven or existing technology. For example, it is well known that Nissan has put thousands (maybe a million?) miles on the same battery pack technology, just not in a "commercially available" vehicle. How else could they make the business decision to offer 100k mile warranties (I can assure you it's not because they're altruistic)? Seems as though early returns on the car are proving it out to be one of the most well-designed, reliable new vehicles EVER (electric or otherwise); continuation of that trend could ultimately prove the 2011 Leaf to be a v2.0 or v3.0 car on closer inspection.

 

[smilingbee]

We have leased our 2011 Leaf.

The main reason that we leased this car, is that it is a V1.0 product. (The second being the excellent financials which allow us to drive the car essentially for free for 39 months)

How is it essentially free for you for 39 months?

 

[OrientExpress]

We have leased our 2011 Leaf.

The main reason that we leased this car, is that it is a V1.0 product. (The second being the excellent financials which allow us to drive the car essentially for free for 39 months)

How is it essentially free for you for 39 months?

It is free because of the federal & state incentives and that we sold our 2007 Civic hybrid, the car the Leaf replaced, for more than the total cost of the lease and our projected energy costs for the Leaf. We will actually have a positive balance on the entire transaction at the end of 39 months. It will be cheaper than if we had kept the Civic for another 39 months.

 

[IBELEAF]

People who buy cars and keep them as long as possible shouldn't worry about depreciation. I have Mitsubishi CUV that lost over 50% of its value in 4 years. That's $16k. Was I worried when I was buying it knowing that Mitsubishi doesn't retain good value? Not really, it's a great car other then gas dependency and I plan to keep it for another 4-6 years.

 

[smilingbee]

I'm planning on buying. I looked seriously into leasing, but the lease terms are not good lease terms (high money factor, low residual), and the "option value" for turning the car comes to about $3900 (not including TVM/discounting) after 36 months.

One angle I think worth considering is that thousands of LEAFs will be coming off their lease in 3-4 years. Nissan will have to do something with the cars that get turned in. If the "technology" (battery, on-board charger, etc.) has really advanced to the point that the value of the "legacy" cars has declined dramatically, then at some point it behooves Nissan financially to retrofit those older cars -- upgrade the battery packs, chargers, firmware, etc. -- to the latest technology. If they do this for thousands of cars, they will have some operation to retrofit/upgrade cars at-scale.

An EV is not like most consumer electronics devices. The price and materials/mass of the thing give it more permanence. I can buy a new laptop every year; the price point isn't prohibitive, and I can store all the old laptops in my house without being too intrusive. The same principle is true for other consumer electronics devices. It is NOT true for EVs -- unless you're Jay Leno, you probably don't have the garage space to store a new EV that you buy every 3 yrs. Someone has to bear the storage/teardown cost, and it just doesn't make economic sense to me for EVs to be "shelved" after 3-4 yrs. I think the likely scenario is that they are upgraded.

 

[LTLFTcomposite]

IMHO it's all going to come down to a) gas prices and b) how well the cars hold up, particularly the batteries and c) the availability of more/better EVs.

If four years from now the gas situation has gotten worse and Leafs are performing about as well as they did when they were new, and the battery longevity question has not shown itself to be a big issue, and EV's are in still in relatively short supply, the cars would likely hold their value very well, and in the extreme case even appreciate.

On the other hand if gas is cheap and plentiful, the Leaf has faltered in reliability or range has declined creating questions about how soon batter replacement will be required (and replacement is costly), and there dealers have a variety of newer and better EVs sitting on the lot, well, your Leaf isn't going to be worth much.

Those are the extremes, reality will probably fall somewhere along that line in between.

 

[GaslessInSeattle]

We have leased our 2011 Leaf.

The main reason that we leased this car, is that it is a V1.0 product. (The second being the excellent financials which allow us to drive the car essentially for free for 39 months)

But here's the thing that potentially changes the entire argument: I don't think the Leaf really IS a v1.0 product. Yes, this is the initial version of the car sold commercially, but many of the systems--not the least of which the battery pack--are either proven or existing technology. For example, it is well known that Nissan has put thousands (maybe a million?) miles on the same battery pack technology, just not in a "commercially available" vehicle. How else could they make the business decision to offer 100k mile warranties (I can assure you it's not because they're altruistic)? Seems as though early returns on the car are proving it out to be one of the most well-designed, reliable new vehicles EVER (electric or otherwise); continuation of that trend could ultimately prove the 2011 Leaf to be a v2.0 or v3.0 car on closer inspection.

Bingo! I think we are looking at a V3.0 or later that has had perhaps more R&D plowed into it's first mass market version than any other vehicle in history. With $6 billion invested, with nearly 2 of that going in house to the batteries alone, it really is staggering to think about.
g

 

[OrientExpress]

All of these scenarios are plausible, and their are many variables that will come into play. In my case, I benefited from high gas prices and a shortage of used cars in getting the higher than planned selling price for my 2007 Honda Civic hybrid. 3 years from now, if demand is higher than I am currently projecting, then I will by my Leaf out and then put it on the market.

I do believe that the Leaf (and Tesla & volt) will be the first EVs that will actually have a residual to think about. All of the previous EVs (EV1, Honda EV, and Rav4EV) were all leased vehicles, and the vast majority of them went to the crusher when their lease term was up. There are a few Rav4 EVs still on the road, but that is about it.

It will be fun to revisit this thread in 2014~2015 to compare our projections now and how things actually worked out!

 

[evmike]

I think the technology in the LEAF is already very mature - the only wild card is a new battery. Even if a new technology is identified it will takes years to test and implement it. I'm sure Nissan has factored this into the lease terms since they know what is coming for the next three years. Lithium Air is the great hope but it doesn't exist in a demonstation vehicle.

The real issue in the lifetime of this car is the availabity of quick charge stations. If there are plenty of quick charge stations in the next two years the value of the LEAF will be very competitive with ICE. Especially as people realize $4 gas is here to stay.

If there is not a quick charge network the LEAF will be doomed to niche market and sales will soon peak and it will be the EV1/RAV EV all over again. :|

 

[mdh]

I think the technology in the LEAF is already very mature - the only wild card is a new battery. Even if a new technology is identified it will takes years to test and implement it. I'm sure Nissan has factored this into the lease terms since they know what is coming for the next three years. Lithium Air is the great hope but it doesn't exist in a demonstation vehicle.

The real issue in the lifetime of this car is the availabity of quick charge stations. If there are plenty of quick charge stations in the next two years the value of the LEAF will be very competitive with ICE. Especially as people realize $4 gas is here to stay.

If there is not a quick charge network the LEAF will be doomed to niche market and sales will soon peak and it will be the EV1/RAV EV all over again. :|

I think Nissan is pegging something like $15k residual after three years. This seems horrible? No?