Most EV Drivers Choose To Lease Instead Of Buy
Are you surprised by the title? We’re not — 100% not surprised. Why buy a new car technology as it rapidly improving year after year when you can lease? That is one of the biggest problems carmakers are facing today as they try to sell EVs, and so far, they haven’t come up with the solution needed. How do you sell in an economy that favors leasing and ride-hailing instead of ownership?
It should come as to no surprise that many or even most electric vehicle (EV) drivers would rather lease than own an electric car. The reasons why are many but we can easily point to two obvious factors: 1) The state of the economy still doesn’t favor consumers. 2) The electric car options will be much better in a few years. Why buy a $30,000 or more EV when you can lease and then buy a much better $30,000 or more EV in a few years?
According to Bloomberg New Energy Finance (BNEF), 80% of fully electric car drivers lease their cars and 55% of plug-in hybrids (PHEV) are leased*. For $220 per month or even sometimes as low as $100, you can lease an electric car. These are hard deals to pass up.
Used to building a new car every 5 years and updating it yearly, the industry hummed along for decades. But consumer affordability has not kept up with inflation. Owning a gas car also implies living with fluctuating gasoline prices. Owning a new technology (an EV) seems risky, though — so hey, why not lease?
EVs came along with the promise to give us an affordable and cleaner energy solution for our mobility needs. They’re already doing so for many people, with more promise around the corner.
Carmakers Struggle To Make Sense of Economy and What Consumers Need
There’s something else going on here as well, though. There seems to be a disconnect between carmakers’ expectations of the industry and what society needs and is willing to afford. Whether you blame a shy economy that favors big companies but has left a decimated middle class, or simply that Millennials are more interested in experiencing than owning, the result is the same: In times of stretched budgets, people look for a good deal, period.
Millennials are not as interested in owning as Generation X and Baby Boomers. Simply put, they’d rather experience what technology gives them instead of owning products. Add to this that the automotive industry business model is woefully unadapted to their needs, and you can understand why cars appealing to younger generations and the young at heart don’t sell as much.
Consumers have moved into a world of mobility where ride-hailing and a connected seamless experience is what they need, leaving behind the hardware maker. While that means some use of Lyft and Uber today, many are also dreaming of cheap, autonomous robotaxis in a few years. So, again, the thought process is often — “Why make a long-term purchase when I won’t be driving in a few years? I’ll just lease a car for now.”
Are all of these thoughts and decisions 100% rational? Should people be buying or leasing electric cars more? As they say, it depends, and ymmv.
Overall, though, the risk or concern of new tech, the expectation of much better EV tech in a few years, the expectation of a shift to robotaxis and maybe not having your own car at all, and a growing desire to experience something for a bit and then move onto a new experience are four strong reasons why people are leasing electric cars much more than buying them right now.
*Notably, this is a bit of a different percentage than we found over a year ago when we surveyed over 2,000 EV drivers across the US and Europe. But we didn’t find a large percentage of EV drivers lease. For more on that research, see: Buying vs Leasing — Electric Car, Tesla, & Plug-In Hybrid Drivers (CleanTechnica #EV Report).
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