- Last month, the Nissan Leaf outsold every other electric car manufacturer. That means lots of people are buying an electric car, which is good news for America.
- Presumably, lots of existing Leaf owners decided to get out of their current car and get into a new model with all the latest technical features, longer range and shorter charging times, also good news for America.
- Since the BMW i3 has just gone on sale, some of the used Leafs hitting the market must come from people trading up to the i3. That’s more proof that the electric car market is expanding. More good news.
- Added incentives on unsold new cars at the end of the current model year make buying new more attractive than buying used, which is even more good news for America.
If the market for EVs are expanding, then why are prices tumbling? There are a couple of factors at work here.
- Federal and state incentives can knock $7500 – $10,000 off the price of a new electric. There are no such incentives for used cars.
- Dealers and manufacturers are offering heavily subsidized lease payments to move cars off their lots, while used cars don’t enjoy such heavy promotion
- Electric car technology is changing at a furious pace. Today’s batteries go further, last longer and take less time to recharge than just a few years ago when the Leaf debuted. People always want the latest and greatest stuff and are willing to pay for it. But they are less inclined to come up with good money for technology that is out of date or obsolete.
With all this good news, is there any bad news? I think there is.
According to the report, the average used Nissan Leaf lost 4.2% of its value in May. That’s $819 that flew out of the owner’s wallet while he or she wasn’t looking. Most people just look at their monthly payment and figure that’s what their car is costing them, but in fact the true cost of any car has to include sales tax, insurance, maintenance, repairs, fuel and of course depreciation. In addition, any down payment has to be apportioned for the number of months the car is owned. Put all that together and you could argue that a typical owner is spending about $1300 each month to drive a Leaf.
There is good news for people looking to buy a used Leaf, though not so good news for many current owners. But with the cost of the cars tumbling, buyers who want an electric car can get one at a steep discount to the original sticker price.
All that depreciation means more electric cars in total will be on the roads, and that truly is good news for America.