Leasing has swiftly taken over the electric-vehicle market. Nearly 80% of new EVs bought at dealerships are now leased, according to Edmunds data cited by The Wall Street Journal.
That’s up from 16% at the beginning of last year, per Edmunds. And it’s at least triple the industry average, which sits around 20%. One caveat: since we’re talking about EVs bought at dealerships, these figures exclude direct-to-consumer EV makers like Rivian, Lucid and (most importantly) Tesla. Tesla tends to push leases less than many conventional brands, too. Since it makes the three best-selling EVs on sale, the full-market figure is likely considerably less than 80%.
Still, the rise of leasing is among the strangest dynamics in today’s EV market, and the long-term impacts could be immense.
Of course they are! I wouldn’t lease an ICE vehicle but there are several strong reasons to lease an EV right now:
First and foremost, leasing a vehicle brings the $7500 federal tax credit back to a lot of vehicles that no longer qualify when buying under the new rules about where the car is built and where the battery components come from. Some manufacturers are building plants in the US and everyone is changing where they source their batteries so in the long run this will be less of an issue, but for now it’s a strong reason.
Second, I have no real confidence in what the vehicle will be worth once the loan is paid off. With an ICE car I can have some reasonable estimations for different mileages and ages, within a few thousand dollars. Although fears of reduced battery ranges seem overblown, it’s hard to get a handle on what buyers would feel a 6-year-old Blazer EV with 65,000 miles on it will be worth. It’s even harder when newer EVs are less expensive. Tesla significantly dropped the price of popular models like the 3 and Y seemingly on a whim, single-handedly dropping the values of used vehicles for both their own models and other brands. This left many buyers underwater on their loans and was one of the direct reasons Hertz sold off a large part of their Tesla fleet. I’ll let the bank take the risk there. Plus, with a bunch of EVs coming off lease in a few years used prices will probably stay low.
Third, there are some amazing lease deals right now. I was not aware of this, but from the article:
I’m not in the market for a new car right now, but this actually has me wondering if I should sell my current vehicle because even paying off the loan I’d have more than enough for that down payment and it would dramatically reduce my car payment and fuel costs.