Friday, June 7, 2013

Falling Leaf Prices

An article on Autoblog about the Nissan Leaf caught my eye this week.  It stated that the Leaf's resale value has dropped as low as 35% of the original MSRP after three years.  This fact is attributed to the $7,500 tax credit as well as the price drop on the 2014 Leaf, which has fallen by about $6,000.  As a result, 2011 Leafs are now selling for around $14K at auction. 

In my opinion, the Nissan Leaf looks like a dweeb.  It's bug-eyed and the back end looks like a four year old Renault  hatchback.  This resemblance is not surprising given Nissan's alliance with Renault, but in a country that ridicules the French, the Leaf would be better served if it looked more like the Nissan Sentra.  But at $14K, or roughly half the price of a used Chevy Volt, and about the same cost as a two year old Hyundai Elantra, I could get used to the looks. 

Low price aside, I still think there are three drawbacks with the Leaf and electric cars in general.  First, is the environmental impact from mining lithium and disposing the used batteries.  Second is that the car is indirectly powered by coal or natural gas, depending on what fossil fuel your electric company uses to power its electric grid.  Those two factors negate most of the environmental benefits of electric cars.

The third problem is the unknown cost of the battery replacement itself.  $3,000?  $8,000?  Second mortgage on your house?  The Lithium ion batteries used in electric cars are high tech and custom built for a specific model.  Like most new technology, the cost of an electric car battery is staggeringly high but will probably come down in a few years.  But by my rough math, the cost of owning an electric car for 10 years and replacing the batteries is probably close to the same cost you'd pay buying the same priced car and paying for 10 years worth of gas. 

But still the Leaf is tempting because a used one is a $14K electric car.  And the drawbacks are no worse than owning a classic or exotic car, which also have high maintenance costs and are detrimental to the environment.  Like a classic or exotic car, an electric car is fun.  It's different.  You feel good owning and driving it, and all the attention that comes with that.  And in some ways the attention that comes from driving an electric car is better.  In a classic or exotic car like a Porsche, you come across as aloof, arrogant, unapproachable.  In a Leaf, you're just a friendly dweeb.      

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