Low Cost Leases Electrify Plug-In Car Sales On West Coast

Jun 6, 2013
Originally published on June 6, 2013 3:17 pm

A couple of years ago, Democratic politicians at the state and national levels set heady goals for battery powered cars. For example, in his 2011 State of the Union speech, President Obama said, "With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015."

Oregon piggybacked on that with a state goal of 30,000 plug-in cars by 2015. From today's vantage point, these goals look overly optimistic. Oregon counts just over 2,000 plug-in cars on the road today. But since the beginning of this year, consumers on the West Coast are buying electric cars at an accelerating pace.

"It's basically a free car"

Twenty-nine-year-old Miranda Lewis represents the new wave of electric car drivers. Although she's a business manager at Microsoft, she says she's not an early adopter of new technology.

"With the way gas is going, I've been looking at the electric Leaf from the beginning," Lewis says. "But the thing is, I'm not one of those to jump in the boat right away."

Now her moment has come. She just signed a two year lease for a dark red Nissan Leaf, an all-electric compact. Given the fact her daily commute is 30 miles each way, Lewis figures her savings on gas will cover the monthly payment.

"It's basically a free car," she says. "The incentives just are amazing. The state and federal taxes... there's no (sales) taxes."

Pragmatic shoppers

Tony Talton has the title of owner loyalty manager here at Nissan of the Eastside in Bellevue, Washington. He says he's seen a changeover in the showroom traffic that bodes well for electric cars going mainstream. He says pragmatic, cost-conscious shoppers have replaced the true believers and technophiles.

"I hear a lot less talk about environmental, less talk about importing our oil. I hear less talk about the wars and this sort of thing, some of the idealistic reasons I was hearing a year and a half/two years ago. Today, most people are coming in based on advertisement they see for the price of the car."

Talton says consumers are also just getting more comfortable with electric drive technology.

"Part of the reason is that you see more on the road. You can't drive around Kirkland, Bellevue and Seattle and not see three or four Leafs a day. That certainly instills confidence in people."

Location, location, location

New registrations of Nissan Leafs in Washington hit a new monthly high in May. Another battery powered car selling briskly is the much more expensive Tesla Model S. New registrations of those two models plus the hybrid electric Chevy Volt have more than quadrupled in Washington this year compared to the same period (January-May) last year.

Oregon also reports an uptick, although the way it sorts its data makes a direct comparison difficult. Oregon DMV spokesman David House said, "the number of currently registered electric vehicles went up 20 percent in just the first five months of this year."

Most of the buyers appear to be urban, coastal dwellers. Idaho's DMV says it has registered hardly any all-electric cars -- fewer than 100 total. At Edmark Chevrolet in Nampa, Idaho, product specialist Ron Bovee says hybrid models are better suited to his state right now. The plug-in Chevy Volt that he sells has a back-up gasoline engine on board.

"Our population here in Idaho and the Treasure Valley is significantly different than say Portland or Seattle," Bovee explains. "People aren't catching on to [EVs] because they drive trucks every day in this neck of the woods or they drive passenger cars. They're not ready for electric quite yet."

Bovee figures it will take more charging stations -- which are quite scarce east of the Cascades -- and people seeing more plug-in cars on the road to increase public acceptance. But he adds, "Have patience and I promise you they will be there."

Driving new sales

Auto analysts say the introduction of lower cost leases is propelling electric car deliveries. Automakers effectively use a $7,500 federal tax credit to put monthly lease payments on par with similar gas-powered vehicles. On top of that, in Washington state, there's a sales tax exemption for purely electric cars and home charging stations. It expires in two years.

"Those subsidies are being weaved into the lease deals that are out there," says Rich Feldman, an electric vehicle consultant in Seattle. "So yeah, it is definitely playing a role in decreasing that cost. But just like any technology, as you increase mass production you get economies of scale. The manufacturing is going to be able to march that price down."

Until recently, Feldman worked for a federal contractor supervising the installation of electric car charging stations. He was curious how the current pace of electric car sales compares to the adoption of the first hybrid cars a decade ago. So he found national numbers for that.

"You're seeing it much higher than the equivalent uptake of vehicles such as the Prius," Feldman says. "If you compare it to the first three years of Prius sales, we're far exceeding those levels of sales."

A program manager at the Oregon Department of Transportation also says the uptake of electric cars is happening faster than early hybrid cars. But here's one more data point for context. In May, Ford sold more of its F-series pickup trucks per day than Nissan, Chevy and Tesla each sold of their electric models all month.

More all-electric models are coming later this month. General Motors plans to release the 2014 Chevy Spark EV in Oregon and California in mid-June. In a recent media statement, GM said it would offer $199 per month leases for the Spark EV, matching the advertising for the Nissan Leaf. Meanwhile, Daimler is rolling out the two-seater Smart Electric Drive nationally also with a $199 per month lease offer.

On the Web:

National hybrid and electric vehicle sales figures - HybridCars.com 

Electric Car Calculator: Compare Electric to Hybrid, Diesel & Gas - BeFrugal.com

"EVs Winning the Race in the Northwest" - New Energy Cities

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