Would Battery Leasing Ease Sticker Shock On Costly Electric Cars?

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2013 Smart ForTwo Electric Drive (European version)

2013 Smart ForTwo Electric Drive (European version)

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There's no getting around it: Hybrids cost more than gasoline models, and plug-in electric cars cost a lot more than gas vehicles.

Each type of green car cuts operating costs, either by raising gas mileage substantially or replacing gas costs with grid electricity that generally cuts the cost-per-mile by two-thirds or more.

But that's a hard case to make when a Nissan Leaf starts at $35,200 and a similarly sized Nissan Sentra starts at $16,430, or less than half that.

Most early electric-car buyers don't choose their cars based on payback; it's a nice side benefit, for sure, but it's not why they bought their cars.

But to spread into the mass market and sell in higher volumes--which will itself lower costs--electric cars have to get cheaper. Much cheaper.

Buy car, lease battery?

Now analyst Pike Research looks at the idea of carmakers leasing the pricey lithium-ion battery pack for a set monthly payment, which radically cuts the price of the car itself.

2013 Smart ForTwo Electric Drive (European version)

2013 Smart ForTwo Electric Drive (European version)

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"If the European programs boost sales," writes Scott Shepard, "you can be sure the model will make its way across the Atlantic."

They may be about to do that even before the jury returns on whether European battery leasing leads to sales the carmakers wouldn't otherwise have gotten.

In an interview at the New York Auto Show in April, Annette Winkler, the global head of Smart, said the company's revised and more powerful 2013 Smart Electric Drive model will be the lowest-priced battery electric car on the U.S. market--"below $26,000."

She hinted that Smart would bring its European battery leasing model to the States--which would make Smart the first company to test such a program.

A French thing

Over the years, battery leasing has been proposed by many manufacturers, analysts, and third-party companies.

Renault Fluence ZE electric cars in Israel, provided by Better Place [photo: Better Place]

Renault Fluence ZE electric cars in Israel, provided by Better Place [photo: Better Place]

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In Israel, for example, Better Place customers buy their cars--right now, only the Renault Fluence ZE is available--but lease their battery from the company, paying for a set number of miles per year. 

Similar schemes are available in France for four electric Renault models and the small van from startup maker Mia, with battery lease costs of $50 to $100 a month, but they've never been tried in the U.S.

Nissan was rumored to be looking at launching its Leaf battery electric car that way.

But when the Leaf arrived at dealers in December 2010, it carried a single purchase (or lease) price for the entire car, battery included.

Conservative buyers?

So we wonder whether other makers may wait to see how Smart succeeds (or doesn't) with the leasing of its low-volume Electric Drive two-seat minicar in the U.S. market before deciding whether to pursue such a radical approach.

Mia Electric microbus

Mia Electric microbus

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U.S. car buyers are often surprisingly conservative, and the fear of being left with a battery-less car that can serve only as a lawn ornament is likely top of at least some consumers' minds.

Battery life: no worries

On the other hand, leasing a battery would completely get rid of fears about battery packs needing replacement before the car's useful life had expired. On a three- or five-year lease, the assumption would be that with a new lease comes a new battery.

What do you think? Would you be more likely to buy a car and lease the pack, or would you want your plug-in car to come with a single price for the vehicle and its pack together?

Leave us your thoughts in the Comments below.

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