Despite the popularity of EVs, they still haven’t replaced gas vehicles. Why?
Electric Vehicles have gained popularity among consumers and manufacturers. They produce no gas emissions, which makes them an attractive alternative. Thus, more manufacturers are introducing EVs in the market. Despite this, buying an EV is not as easy as it seems.
No emissions
An electric vehicle does not generate gaseous emissions that are dangerous for the environment. On the contrary, a hybrid car still uses fuel to power its electric engine, thus producing emissions harmful to the environment. But there is a catch. The electricity used to charge an electric vehicle may be either renewable or non-renewable. Indirectly an electric vehicle may still be contributing to pollution because of the generation of electricity using non-renewable energy sources. However, companies such as Envision Solar are testing their charging stations using renewable energy sources.
Cheaper to maintain
An electric vehicle is expensive. But it has less number of body parts than a conventional car, it is cheaper to maintain. Moreover, an electric car yields the same mileage as a gas-powered engine. However, car manufacturers are working to increase the capacity of an electric battery, so people will get more mileage.
Incentives
Governments offer incentives to citizens for purchasing an electric vehicle. These include subsidies for home charging points for an electric vehicle.
What barriers do Electric Vehicles face in widespread adoption?
Cost of the vehicle
Despite the number of EVs rolling out in the market, the cost of the vehicle is still a significant problem in its widespread adoption. The most expensive component of an EV is the battery. The raw materials and the production cost is the reason why EVs are expensive for the average consumer. People from higher income brackets can afford a car, the average user may have to rely on used-cars or lease them.
EVs like ones produced by Tesla use rechargeable, lithium-ion batteries. Manufacturing a battery requires a lot of care and attention. Exposure to air or moisture can cause the component to burst into flames. This is why the cost of an EV remains so high. According to one estimate, a lithium-ion battery manufactured by Tesla costs around $10,000. Although purchasing an EV is heavy on the pocket, the actual maintenance of the vehicle costs far less than compared with a conventional, gas-powered car.
Charging stations
EVs are not be confused with hybrid cars which run on fuel and electricity, EVs run on electricity alone. Conceptually this sounds great, but recharging an EV requires charging stations which are limited. Car manufacturers such as Jaguar, Audi, BMW, and Mercedes-Benz are also stepping up their game in the EV market. As more EVs hit the market, there is a need to plant more charging stations in cities and along highways.
According to a report, to meet the growing demand of EVs, the US needs to install at least 330,000 additional public charging stations. For this, a funding of $4.7 billion is required to achieve the goal by 2025. Currently, there are 22,000 charging stations in the US and Canada. Companies such as ChargePoint, Shell, and others manufacture and deploy charging stations. Although Tesla has installed about 12,011 of its Superchargers in 1,422 locations worldwide. However, these public charging stations can only be used by Tesla cars.
Depreciating value
Compared to conventional cars, the value of electric and hybrid vehicles depreciates by 60%-70% over five years. Usually, a car loses 50% of its initial value over 5 years. An electric vehicle has less number of parts as opposed to a combustion engine. This means lesser maintenance required. Moreover, an electric vehicle has less repair and fuel costs. These factors should increase the resale value of an electric vehicle and hybrid cars, but despite this, their value decreases.
Several factors account for this. The US government provides incentives to the EV owner. However, these are not available to people who purchase a used electric car. Secondly, there aren’t enough charging stations necessary for making electric vehicles available on a large scale. Added to this is the fact that electric vehicles have a short range than a conventional vehicle. According to one site, a Volkswagen e-Golf can give a range of 144 miles with a single charge. The site claims that an electric vehicle can give on average 85% of the range that is advertised. Older electric vehicles face depreciation in the range, making it difficult for buyers to resale it.
What does this mean for leasing an EV?
Car leasing deals for electric vehicles is a better alternative than buying the car outright. Not only is it a cheaper option, but the depreciating value of the car does not affect the lessee. Experts suggest leasing and not buying an electric vehicle.
Fast changing market
Since new electric vehicle models are being rolled out yearly, investing in one is not a smart move financially. Given the high price tag of an EV, it is difficult for buyers to keep upgrading their vehicles. Since leasing car does not give you ownership, it is easier for you to switch over to the latest model.
Reduce fuel cost
When you use an electric vehicle, you don’t have to pay for the fuel costs. However, you have to pay for charging your vehicle. The price paid for charging is nothing compared to the fuel prices. Hence, in the long-run leasing, an electric vehicle saves more money than you may realize.
Easy maintenance
Electric cars require little maintenance to begin with. Some companies provide maintenance packages for electric vehicles. This means that the cost of maintenance for a car is almost negligible. Moreover, EV car owners have to pay for battery replacement. Since an EV battery costs 25% of the worth of a car, as a lease owner, you don’t have to worry about this.
Don’t have to deal with depreciation
In the first year of ownership, an EV experiences 50% in depreciation. Even though an EV depreciates quickly, the lease of the car is cheap. This is one of the reasons why millennials are flocking to lease an electric vehicle while keeping the environment clean.
Leasing is a great way to reduce the impact of automobiles on the environment. Not only do they make sense financially but also allow you to avail incentives offered by governments.
Car leasing companies such as Quitalease provide a variety of cars, including crossovers, SUVs, luxury cars, and others. Quitalease provides a platform for lease sellers and buyers to exchange a car lease without hassle. If you want to get rid of your car lease, simply post an ad along with relevant details of the car on Quitalease. You will have buyers approach you.
As governments push to incentivize the purchase and use of electric vehicles, more consumers are flocking to it. However, certain barriers affect this. Sky-high prices and quick depreciation has prevented people from purchasing an electric vehicle. This is why leasing an EV makes more sense. Moreover, there are limited charging stations that can keep up with the demand for electric vehicles. Despite this, car manufacturers are rolling new EVs in the market, with better technology. It will take some time before the technology in EVs can be made affordable for the average consumer. The trends in the sale of EVs show that there is potential for growth. According to estimates by Inside EV, in 2018 EV car sales rose from 34,074 in October 2018 to 49,900 in December 2018.
