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Battery Leasing topic

Sun Feb 21, 2021 7:39 pm

Given their current high costs, limited longevity, rapid obsolescence and the desire to re-use and then recycle them, I've long felt that battery leasing was desirable if not essential both to hasten BEV adoption, and to ensure cradle-to-grave environmental concerns are addressed. This has been discussed in various other topics, e.g. Smart and Nio, but I think it deserves a topic of its own to make such info easier to find. Without further ado:

GCR:
Hyundai explores battery leasing to lower EV prices, coordinate reuse
https://www.greencarreports.com/news/11 ... nate-reuse

. . . The automaker on Thursday announced a memorandum of understanding with the South Korean government and partner companies to create an "ecosystem" around EV batteries, according to a press release.

One of the partners is KST Mobility, which will lease batteries from Hyundai for a fleet of electric taxis. The company will pay a monthly fee for the battery leases, which will result in lower upfront costs for the purchase of EVs, Hyundai said.

After "extensive usage," Hyundai said it will recover the batteries and use them in an energy-storage system for fast charging of EV taxis. . . .

LG Energy Solution will convert used batteries for energy storage, and will collect data to help the effort. Note that Hyundai also announced a battery-leasing partnership with rival SK Innovation last year.

Battery leasing is not a new idea. The industry has been regularly asking about this idea for a decade, as a way to ease sticker shock on electric cars.

However, no company has managed to commercialize battery leasing on a large scale—so far.

Chinese automaker Nio wants to make battery leasing a significant part of its business. Last year, it announced a "battery as a service" business model with monthly battery lease fees, and discounts on the purchase price of EVs for customers who chose to lease the battery rather than buy it outright.

The idea has also caught on in Europe—especially with a program offered on the Renault Zoe that enabled some significant range upgrades.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

SageBrush
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Re: Battery Leasing topic

Sun Feb 21, 2021 8:40 pm

It is not so much a stupid idea, as a marketing ploy foisted on the uninformed

On one hand, it is a universal pre-pay scheme dressed up as an insurance hack that lacks the essential ingredient of spreading out the risk of high cost, low incidence events
On the other hand, it just points out that some car companies have yet to engineer long lived batteries.

It will be as successful as Fenix
Last edited by SageBrush on Mon Feb 22, 2021 2:17 am, edited 1 time in total.
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Re: Battery Leasing topic

Sun Feb 21, 2021 10:02 pm

SageBrush wrote:
Sun Feb 21, 2021 8:40 pm
It is not so much a stupid idea, as a marketing ploy foisted on the uninformed

On one hand, it is a universal pre-pay scheme dressed up as an insurance hack that lacks the essential ingredient of spreading out high cost, low incidence events
On the other hand, it just points out that some car companies have yet to engineer long lived batteries.

It will be as successful as Fenix

No car company has "engineered long-lived batteries" yet*, nor are batteries cheap, and they are still obsolescing rapidly. Reducing initial price makes it possible for more people to afford them, and providing an easy, affordable battery upgrade path which essentially prevents their rapid obsolescence and/or guarantees a higher capacity/range over time than would otherwise be affordable, reduces the current throw-away treatment of BEVs and extends their useful lives. This provides greater value to new and used customers. What about these statements is uninformed?


*8 yrs/70% doesn't meet my or most people's definition of long-lived, for a product that costs tens of thousands.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

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Re: Battery Leasing topic

Mon Feb 22, 2021 2:44 am

A pig is a pig, no matter how much lipstick it wears

You want to rent ? Lease the car
You want monthly payments ? Take out a loan

Whatever financing scheme you choose, it does not change the battery.

Strip away your new-age financing wrapping, and your desire for a cheap battery boils down to recommending that the manufacturer subsidize the battery. Yawn.
2013 LEAF 'S' Model with QC & rear-view camera
Bought Jan 2017 from N. California
Two years in Colorado, now in NM
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Re: Battery Leasing topic

Mon Feb 22, 2021 10:27 pm

SageBrush wrote:
Mon Feb 22, 2021 2:44 am
A pig is a pig, no matter how much lipstick it wears
I agree, and to the average consumer BEVs are high-priced, limited-capability pigs with short usable lives. Which is why, ten years after mass-produced BEVs became available and despite heavy subsidies, they've achieved a U.S. market share of just 1.8%.

SageBrush wrote:
Mon Feb 22, 2021 2:44 am
You want to rent ? Lease the car
You want monthly payments ? Take out a loan

Whatever financing scheme you choose, it does not change the battery.

Strip away your new-age financing wrapping, and your desire for a cheap battery boils down to recommending that the manufacturer subsidize the battery. Yawn.

Gee, I guess GMAC and all the other financing arms of manufacturers are subsidizing the purchase of their cars.

I've always bought my cars for cash, but most people can't or don't. Yet
until the 19-teens all cars had to be bought for cash. Then the manufacturers realized that if they could reduce the size of the lump sum payment up front they could sell far more cars, and make a profit from the interest to boot. Offering battery leasing is no different.

And of course it changes the battery - if you like your car but you've got the option of upgrading to a higher capacity battery for just a few dollars more a month, and that's valuable to you, you can. Or if your range needs have reduced you can go the other way and save yourself some money every month.

The benefit of battery leasing, aside from making individual BEVs more affordable as well as viable over the car's rather than the battery's lifetime, is that it also ensures re-use and recycling of the packs. Ideally the companies would do this on their own for profit, but if not a law like Germany's where the company is responsible for taking their product back and recycling it at the end of its life is another way to go.

Battery leasing is an option. Ideally, batteries would be cheap enough, capable enough and durable enough that it would make sense to buy them along with the car and expect them to last the lifetime of the car, while providing the same capability as new. Obviously no such battery is yet available, so we need some other solution to boost BEV sales until they are. Battery leasing is one such option. At least that way, unlike leasing the entire car to avoid rapid obsolescence (BEVs are apparently leased at a considerably higher rate than ICEs), you can get the full life out of the vehicle. As it is, I would never buy a BEV now, because they don't meet my needs and I know they'll be significantly more capable as well as cheaper in a few years. Right now, we're seeing a much more expensive repetition of the PC era, where what's expensive and top of the line now will be much cheaper and mundane in three years. Most consumers see no reason to jump on that train at the moment.
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Re: Battery Leasing topic

Tue Feb 23, 2021 8:37 am

I enjoyed reading the (good natured) back-and-forth, but I agree with most of what @SageBrush is saying.
I'm not a fan of "battery leasing" schemes, and (for the most part) the ones that have been tried (mostly outside the US) have failed miserably.
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LeftieBiker
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Re: Battery Leasing topic

Tue Feb 23, 2021 1:54 pm

I think that as long as we have affordable car leases, that battery leasing is a non-starter.
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Re: Battery Leasing topic

Tue Feb 23, 2021 2:15 pm

Agreed Leftie

I could only see a battery lease working well in the US if the car batteries were truly easily replaceable (Leaf is as good as it gets there), and the OEMs wanted to have their customers upgrade as an aftermarket upsell.

I do think Nissam could have done this and been successful, but it was too outside of their comfort zone/knowledge.
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SageBrush
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Re: Battery Leasing topic

Tue Feb 23, 2021 3:07 pm

LeftieBiker wrote:
Tue Feb 23, 2021 1:54 pm
I think that as long as we have affordable car leases, that battery leasing is a non-starter.
And if 'we' did not, 'we' would not (have affordable battery leasing).

Either the compliance car manufacturers take it on the chin, or they do not. The new-age BaaS smoke up your nostrils is quite besides the point.
2013 LEAF 'S' Model with QC & rear-view camera
Bought Jan 2017 from N. California
Two years in Colorado, now in NM
03/18: 58 Ahr, 28k miles
11/18: 56.16 Ahr, 30k miles
09/20: 54.3 Ahr; 38k miles
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Re: Battery Leasing topic

Tue Feb 23, 2021 10:30 pm

Stanton wrote:
Tue Feb 23, 2021 8:37 am
I enjoyed reading the (good natured) back-and-forth, but I agree with most of what @SageBrush is saying.
I'm not a fan of "battery leasing" schemes, and (for the most part) the ones that have been tried (mostly outside the US) have failed miserably.

It's varied. Some have failed, and others including here were successful. When Smart offered battery leasing here, something like 80%? (forget, will try and find the number) [Edit: Found it - 90%. See https://www.mynissanleaf.com/viewtopic. ... g#p491121 ] of customers opted for battery leasing, at least until that demographic had been satisfied.

Again, it's an option that makes BEVs more sensible for long-term ownership, while reducing the throw-away aspect. People who flip cars more often than I buy socks will continue to do so. Those of us who buy cars for the long haul, but know that no current battery will remain useful for the life of the rest of the car, will be able to consider a BEV. The only option now is to lease the whole car, which essentially means throwing away the 60-70% of the car we like for the 30-40% that is rapidly degrading and reducing its usefulness to us, at the end of the lease.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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