I’ve been an advocate for EVs since restoring a 1994 USElecticar Chevy S-10 in 2009. I’ll admit my time horizon for wide adoption of EVs at that time was decades out. Little did I realize that two players would appear Nissan with the Leaf in 2011 and Tesla with the Model S in 2012. Hindsight provides the opportunity to see this as a one-two punch to the traditional auto business. Nissan targets the average car buyer in a traditional manufacturer/dealer environment. Tesla takes aim at the high-end luxury segment in a nontraditional manufacturer direct to consumer format.
The ramifications of the risks these two companies took are monumental. If Nissan’s EV took hold, they would gradually eat their own ICE lunch. Tesla was all in, either EVs captured the public’s fancy or they would lie quietly in the dustbin of history. Equally interesting were the two branches of EVs they pursued. Nissan building a city car with limited range, moderate price point, and handicapped with long charging times. Tesla went with range and charging capabilities that made it a city/touring car, albeit with premium pricing. Reminiscent of the VHS/ Betamax format battles during the video recording wars in the 1970s, who will win?
Range Costs Dropping
The shakeout may be just around the corner. The first-tier auto manufacturers are climbing on the EV wagon, some reluctantly, others moving a bit more expeditiously. GM played with the city car for a while but moved to a 238 mile range platform in the Chevy Bolt (but still without superfast charging or a widespread network of such chargers along highways). Nissan moved up to the 150 mile range on the new LEAFs due 2018 while maintaining price point. Tesla offers cars with 300+ ranges, and of course a mind-blowing 620 mile range is coming with the new Roadster. Other auto manufacturers are announcing similar performance in upcoming releases. Is there a Moore’s Law corollary for battery development?
Set aside the tech, specs, and performance arguments for a moment. What does the average car buyer want? Cost and convenience would be top of the list. The cost of EVs, both capital outlay and dollars per range mile, are dropping sharply. The 2018 LEAF is $199 per range mile at the base price versus prior years being: 2017 at $279 and 2013 at $355. The Bolt is at $157 per range mile, and it’s $159 for the Tesla Model 3. These numbers change slightly depending on addition of accessories and dealer fees, but they give us a starting point. Convenience is the crux of owning an EV. How easy is it to buy, drive, and charge?
Used EVs Range Cost Is Even Less
Recently, I made the decision to sell my ICE car and acquire a second EV. After the ICE left the garage, my first effort was to purchase a used EV, preferably a 2015 Leaf. Having driven a 2013 for three years, I was pleased with it, but turned it in for my current Tesla Model S. But for a second “city” car it would be perfect. At an average price in my area of about $11,000 for a 2015 LEAF with 30,000 miles, the cost per range mile drops to $131.
Lease For Even Less
A 2018 LEAF S according to the Nissan website will be approximately $30,000 — amount due at closing $2,799, with payments of $229. Lease it for 3 years for a total out of pocket cost of $11,034. Divide that by 150 miles of range and the cost per range mile is down to $74. New is warrantied, so repairs are almost zero. This will change, of course, when Nissan loses the $7,500 tax credit, which may occur in 2018.
The Traditional Car-Buying Experience
Several issues evolved trying to purchase a used 2015 LEAF. Prices ranged from $8,599 to $15,000 based on mileage, model, and condition. Dealer-advertised LEAFs were often not available or sold upon inquiry. The prices listed in the advertisements didn’t include the Dealer Fee, Document Fee, Warehouse Fee, Prep Fee, Registration Fee … and the list went on and on, in one case adding $2,100 to the price.
My last attempt was to drive into a dealership that had 18 salespeople in red polo shirts standing in front of the door waiting for someone to drive up. Barely able to get out of the car, they were on me like flies. I told the first one that I was here to buy a LEAF on their lot. I told him that I would write a check for that car, OTD (out the door). He needs to check with the sales manager. He comes back and says, “Is that the best you think you can do for the car?” Now he says, “Would you be interested in any other car?” Then, “Would you like to lease a car if I can get payments down to $269/m?”
The upside is I left and ordered a new LEAF for delivery in 2018 from the Nissan portal. A very nice email from Nissan indicated that they would notify the local dealership to arrange pickup when it was available. Did not realize that the local Nissan dealership would bombard me with emails to come on in and test drive one today. I asked the Sales Manager if they really had a 2018 LEAF or if they were pulling my leg. No LEAF, but would I be interested in one of their ICE cars?
The Other Car-Buying Experience
Charging makes the sale
After arriving home and considering this trip, I cancelled the order for the 2018 LEAF and ordered a Tesla Model 3 despite no promised delivery date. Yes, we can argue that we drive less than 40 miles per day. Yes, 95% of the time, we charge at home. But when the three primary players in terms of range — Bolt, LEAF, and Model 3 — are within a few thousand dollars of each other, the convenience of Tesla’s charging system gives the Model 3 the edge. Purchasing one of the others right now would be like kissing your sister.
All of the traditional auto manufacturers appear to be moving forward in the EV market by assuming that someone — the government, VW, EvGo, ChargePoint, or others — would provide a convenient charging system for them. Nissan and GM are placing fast DC chargers at dealerships. They risk alienating EV owners when the dealership closes at night with gates preventing access to the charger.
Tesla certainly has nothing to fear from the mainline auto manufacturers unless one or all decide to make convenient charging part of the total package. EV owners living in apartments or housing without easy overnight charging benefit from a Supercharger-style system that approximates the convenience of the ICE car fuel station without the trip to gas station wonderland.
Changing the fueling paradigm
Other possibilities might be if convenience stores added fast chargers. They would install chargers that only took as much time to charge an EV as it took for the owners to stop in for a candy bar and cup of coffee. Of course, the parallel development has to be EVs with the ability to charge at very high rates. Again, Tesla may be leading the way with its combo superchargers and amenities.
All of the old canards of EVs are falling except one. How fast can I charge? Tesla broke the code on that one. It has to be just a matter of time before Tesla’s competitors figure it out as well.
Photo Credit: ChargePoint charger at Buffalo Wild Wings, 2013 Nissan LEAF via Court Nederveld, 2018 Nissan LEAF via Nissanusa.com, Tesla Supercharger Map via Tesla.com
7 thoughts on “The Secret EV Sales Tool!”
Court, great article pointing out some of the disadvantages of the manufacturer/dealer marketing scheme compared to direct-to-consumer sales. When comparing General Motor’s manf/dealer marketing strategy to Nissan’s private dealership marketing, its obvious the differences in the two puts Nissan Leaf sales at the greatest disadvantage. We have surrendered our 2015 Nissan Leaf Lease and looking to go with Tesla Model 3 or GM Volt only because of Nissan’s lack of influence over the way its private dealerships fleece and hound Leaf purchasers.
Apparently I’m not the only one that suffered at the hands of a Nissan dealership while Nissan bent over backwards to make me a loyal customer. The story behind acquiring my 2013 leaf is enough to make a grown man cry.
I guess it’s different here in the UK, the Nissan Dealership I bought my used 2014 LEAF from have been great and may loan me a 2018 LEAF to do a series of youtube videos.
Maybe StoreDot or Enevate batteries will solve it too.
StoreDot have certainly made a lot of announcements and courted the media, but they have yet to bring their lab breakthrough to production. This transition from lab to production kills many “breakthroughs” and I’m not being critical of StoreDot – some big brands have announced lab breakthroughs prematurely and then go silent when the transition to production kills the product.
Ordering the Tesla model 3 was a great decision. It’s more efficient than almost any EV, the batteries will last 20-30 years with it’s excellent liquid cooling. It’s also the safest car ever made. The S and X are also great but more cost and less efficient. Miles per kWh is the new goal.
If miles/kWh was the golden ticket everyone would be queueing up for a Hyundai Ioniq EV.