Battery leasing will give best wholelife costs for EVs, says Glass's

Battery leasing for electric vehicles is likely to provide wholelife costs superior to other commercial approaches, research suggests.

The figures were released at an RAC Foundation event last week and are the first comparative values released for an electric vehicle (EV) with the battery included, an EV with a leased battery and a range-extender EV.

The values show that the Nissan Leaf, the purchase cost of which includes the battery, retains 35% of its value after three years and 36,000 miles.

In comparison, an electric vehicle similar in size, but with a leased battery, should retain 54% of its original value over the same period.

A range-extender electric vehicle, which drives only using electric power – but in which the battery is charged by a petrol engine – will retain 43% of its value. For comparison, Glass’s also included an average residual value for the equivalent diesel vehicle, which will be 44% after three years and 36,000 miles.

Andy Carroll, managing director at Glass’s UK, said: “The use of wholelife costs is the only way to assess the new powertrain technologies and differing business models.

“Our analysis shows that the new wave of vehicles is economically viable, even before taking allowance of company car tax and local incentives. In particular, the battery leasing option that we assessed is attractive for the car buyer as it not only means the initial purchase price of the electric car is closer to a conventional vehicle, but also removes the uncertainty of battery durability and replacement cost.”

The overall depreciation costs over three years for these electric vehicles are calculated to be £16,765 for the Nissan Leaf, £16,570 for the range-extender and £8,275 for the electric vehicle with a leased battery. A similar diesel model will depreciate by £9,750 over three years.

In terms of cost per mile over three years, the Nissan Leaf works out at £0.49 per mile, the range-extender at £0.52 per mile, the diesel at £0.39 per mile, whilst the clear winner is the electric vehicle with a leased battery at just £0.33 per mile.