Op-ed: Leasing an electric vehicle is more affordable and practical than you might think

By Al Cavallo

Everyone loves to talk about the weather, and recently there has been plenty to talk about.  Extraordinary drought and wildfires in Eastern Siberia and the U.S. Western States, 100-degree-plus temperatures in the Pacific Northwest, flooding in China, Germany, and France beyond anything experienced in the recent or distant record, are among many recent extreme weather occurrences. It seems that something ominous is happening to the planet. These events and other evidence point to a fundamental change in our global weather system, and the cause appears to be the heating of the atmosphere due to increased human emission of greenhouse gases, primarily carbon dioxide.  

While these disturbing weather patterns are still fresh in our minds, we should resolve to do something to stop our drift into disaster. Keeping in mind the major source of carbon emission in New Jersey is automobiles, and that the average household in New Jersey burns about thirty barrels (1,260 gallons) of gasoline every year, we should all be moving from gasoline to electric-powered cars. While even five years ago this might have been an unrealistic suggestion, today everything has changed. There are at least six long-range (>225 miles) electric vehicles available for about $40,000 list price, all with the latest safety technology such as blind-spot detection, lane-keeping assist, and collision warning. Thus, electric vehicle sticker prices, excluding rebates, are competitive with conventional cars: the average transaction price for a new car is now about $40,400.      

In addition, the total financial incentives of more than $15,000 ($7,500 Federal and $5,000 New Jersey rebate, no New Jersey sales tax (6.625%) on a lease or a purchase) are generous; this does not include additional savings of up to $1,000 per year on fuel expenses and much lower maintenance costs. These factors make an electric vehicle not just a reasonable, but even a compelling choice.

There are a few points to keep in mind:

  • This is a new technology, so careful research is necessary.  An excellent source of information and side-by-side comparisons is www.fueleconomy.gov .
  • Reviews of electric vehicles are available online (from automotive magazines like Car and Driver, etc.)
  • Leasing allows one to take immediate advantage of the federal tax credit, no matter what your income or tax payments are.
  • Typical sales people are often not aware of electric vehicle capabilities or rebates and savings.  For example, not all electric vehicles qualify (e.g. Tesla, Bolt) for the $7,500 federal rebate, and fuel and sales tax savings are usually never discussed.   
  • Recharging at home at 120 volts is slow but adequate for most users. Apartment dwellers must, for the moment, be more creative (charge at work). 
  • The best deals are available on the base models, which also have excellent safety features.
  • Purchasing a pre-owned electric vehicle is also an option.
  • The big electric vehicle range killer is winter heating. Beware!

We signed a three-year lease on our first electric vehicle in 2014. It had an 84-mile EPA range and required a $2,000 down payment and a $200 monthly payment. The $7,500 federal rebate is used to reduce the monthly payment and the residual value (the purchase price of the car at the end of the lease.) Thus there is no need to wait to file federal taxes to take advantage of the federal rebate. This was a wise choice since electric vehicle technology was and is changing rapidly: Our 84-mile range car was obsolete by the end of the lease. 

Last year, we decided to replace our gas-guzzling Prius and our short-range electric vehicle, a Leaf, with a single, leased long-range electric vehicle.  Our criteria were long-range, affordability, and utility (a hatchback with sufficient luggage space).  After doing our research on all the models available at the time, we chose an SUV crossover, a Kona EV with a 258-mile EPA range and a competitive price of $39,000. With the state and federal rebates, this is equivalent to a $26,500 initial price, an excellent value. There is also no sales tax on this lease. The shorter range (<150 miles) electric vehicles are an even bigger bargain: with incentives they are available for under $20,000. However, while these are excellent commuter cars, they are not suitable for long journeys.

Since we were replacing a long-range gasoline car with an electric vehicle we began to pay careful attention to electric vehicle range and efficiency and soon noticed that these exceeded the EPA figures by about 30 percent. It turns out that the EPA laboratory tests are conducted with the default efficiency settings, and the results are multiplied by a factor of 0.7 to account for real world results. In addition, a few manufacturers, e.g. Tesla, are allowed to do their own testing. Unfortunately, none of these subtleties are explained on the website. 

All of this means that for most electric vehicles, significantly greater efficiency (and fuel savings) and longer ranges are possible with reasonably careful driving. 

It is clear that the movement to replace gasoline-powered vehicles with electric vehicles is not some naive crusade, but rather is well-rooted in what is possible and affordable given current technology.  This transformation of our transportation system should be embraced by everyone as rapidly as possible.               

Al Cavallo is a Princeton resident. He is retired from the U.S. Department of Homeland Security and now focuses on energy policy and technology.


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