Many are excited about buying their first EV. But before you leap away from combustion engines, there are a few things to consider. Maintaining an EV will require a new rulebook, much different from the routine oil changes you might be used to handling. EVs have batteries to maintain and replace, which could present more costs than you know.
Before buying your new EV, consider budgeting for battery care. And with some of the latest services to emerge, battery leasing may be your most affordable option. Based on some of these stats and details, it might make the most sense to buy your EV but lease the battery.
Battery range anxiety is a real phenomenon
Maybe you’ve heard of battery range anxiety and dismissed it as a myth. But the stresses and anticipation of “running out of juice” on the road are real. Other basic concerns for many, prolonging their decision to buy EVs, include anxiety of not finding a place to charge and battery degradation.
The network of charging stations continues to grow, which might help combat some of those worries about being able to charge when you’re out and about. But battery maintenance, degrading power, and expensive replacement continue to be ongoing issues. But what if you didn’t have to buy the battery for your EV? And what if you could have a more affordable and convenient way to swap out batteries over the ownership life of the vehicle?
What if you could just pay a monthly fee to lease your battery instead?
Based on intel from Kelley Blue Book, EV and hybrid batteries will become less efficient over time due to basic degradation. And despite your best efforts to take care of a battery, there’s nothing that can prevent the wearing down of its effectiveness over time.
While the costs of replacing EV batteries are slowly declining, they’re still relatively high. Kelly Blue Book got a quote from a Toyota dealership to replace a battery on a 2017 Prius model for $2,700. Recurrent Auto sourced data to find an average cost of $161 kWh for out-of-warranty battery replacement. Depending on your EV, it could translate to upwards of $20,000.
Instead of buying a battery, you could look into battery insurance plans. VinFast is a new contender in this space, offering a smart solution to the expensive EV battery replacement problem. For 2023 model purchases, VinFast customers would buy the EV but lease the battery. They can then pay a monthly fee to use that battery. And VinFast guarantees to replace any battery that falls below the 70% capacity threshold. And buyers will have the option to accept this leasing arrangement or buy the battery outright.
Increased benefits of leasing the EV battery and buying your EV
Studies show EVs typically lose their battery life at 5% to 10% within the first five years. They’ll degrade at even higher rates beyond those five-year benchmarks, which are typically beyond the scope of warranty coverage. Under federal law, automakers must provide warranty coverage for their EV and hybrid batteries. But for anyone who intends to keep their EV for a long time, leasing the battery can be the best, most affordable way.
Inside EVs point out all the factors that contribute to an EV battery’s rate of degradation, which includes how often you fast-charge, ambient temperatures, and mileage driven. It’s a reminder to EV buyers to pay attention to their driving habits when considering whether to buy or lease the battery.
If you decide to explore battery leasing options, there are other providers to consider. Global News Wire suggests the battery leasing industry will hit $400 million by 2028 and shares insights from other lease providers, including Bounce Infinity, E-ChargeUp Solutions, NIO NextEV Limited, Octillion Power Systems, and VoltUp.
Before you head out to test drive and buy your new EV, do some homework on leasing the battery. For anyone keeping their car beyond warranty coverage timelines, leasing the battery is likely the smartest and most economical move.