Nissan to Lease LEAF Battery

GM-Volt.com picked up on a Nissan CEO’s discussion with a French News Organization about the lease price of the LEAF’s battery.

The price quoted in the piece was 100 Euros, or $150USD. That price may make sense in Europe, where petrol is very expensive, however in the US gas prices are sufficiently low that Nissan would probably need to price it at $129. Can they do it?

Based on the latest estimate of the Volt battery costing $8,000, that would mean that the LEAF battery would cost 50% more (because its 50% larger), or $12,000. Financing the battery over five years at 5% would cost about $140, assuming that you could sell the battery for about $300/kWh after 5 years (consider by 2015/16 the average new battery price will drop from $1000/usable kWh to $500/usable kWh). To get down to the target price of $129, they’d need a resale price of $350/usable kWh, which isn’t impossible.

From the consumer perspective, how much would the battery lease need to cost to equalize the amount you spend on gas every month? We’ll start with a few assumptions: the driver will drive 50 miles per day (out of 100mi city range, 75mi range highway), five days per week plus an extra 60 weekend miles (16K miles/yr); they get about 22 miles per gallon right now; we’ll exclude vehicle cost because the “shell” cost is comparable with a compact car; electricity costs 11c/kWh and charging efficiency is 90%.

The “driver” we specify above will buy 14 gallons of gas per week, or use about 75kWh in electricity. The E-cost is $8.25/week, versus $42/week at $3/gallon. If the $129/mo lease is averaged out to a per week basis (*12/52) the lease is about $29.76/week. Combined is a weekly cost of $38.86, three and a half dollars cheaper than gasoline per week. Over the course of the year that’s $163/yr. Not a whole lot of savings but assuming gas prices go up, the savings get larger. Calculating backwards, the break-even point is about $2.76/gal.

There are a few other issues too – you’re likely to have another car for longer trips. So insurance covering that vehicle will also be necessary (though hopefully not a car payment), minor maintenance like oil changes and new batteries. If you have a significant other then you might already own this car. If you’re single like me, it may not be an optimal situation because you’ll have two cars in your garage and you can only use one at a time (dare I say, you might be better off with a Volt).

The problem of course is range anxiety – a study of Japanese EV users showed that users didn’t want to travel beyond 10 miles from the only charging station. Adding a second charging station gave users the freedom to travel beyond that initial area, but the second station was rarely used. It was just a security blanket.

The bottom line is that EVs are in an interesting situation. In order to make the EV pay off compared to a gasoline vehicle, you need to drive it a lot, however range anxiety factors in and limits the distance people feel comfortable driving – its a catch 22. You get something similar with E-REVs, in that the optimal driving distance for the quickest payback is exactly the EV-only range without tapping the gasoline generator, though people don’t generally worry about range issues.