For a variety of reasons, the U.S. electric car market is just not doing very well. Tesla Motors Co. (NASDAQ: TSLA) is an exception, but we’ll get to that in a little bit. For now, let’s focus on two aspects of electric cars in America. First, as the Wall Street Journal notes, plug-in electric vehicles accounted for less than 1 percent of all vehicular sales for the first four months of 2013. Second, and partly as a response to the generally dismal fortunes of electric vehicles in the country, there are a plethora of discount options that make access to an electric car a rather surprisingly cheap proposition today.
The WSJ discusses one case, that of Atlanta, Georgia’s Bronson Beisel. Beisel bought a Nissan (OTCMKTS: NSANY) Leaf for $1,000 down. That led to a two-year lease agreement for $7,009, with a $7,500 federal credit. On top of that, Beisel benefited from a state subsidy worth $5,000. That brings the out-of-pocket costs for leasing the Leaf for two years to just a bit more than $2,000. The gasoline and electricity balance ensures Beisel’s actually saving a lot more than he ever anticipated. Against $200 per month in gasoline expenses, he’s using barely $15 per month to charge the car. Of course, he is limited somewhat by the Leaf’s range (73 miles), but it’s quite adequate for Beisel’s daily purposes.
Nissan recently cut the price of the Leaf by $6,400, making the current base model available for $28,800. Moreover, the company’s offering a lease program at $199 per month for three years. Alternately, buyers can choose a no-interest 3 year loan. Charge times for the new model are now down to about 4 hours (on a 220V circuit) compared to 2012’s 7 hour charge time.
Tesla, too, recently unveiled a lease offering. And on top of that, the Tesla Model S brags a stunning 265 mile range, which puts it way ahead of the competition. The downside is that the Tesla Model S begins at $62,400 after federal credits.
ABC cites a case similar to Beisel’s—this time in California. Another Leaf leaser took advantage both of the federal credit of $7,500 and the California state subsidy of $5,000, bringing the total cost down to practically nothing. Despite the dismal “less-than-1-percent” figure I mentioned earlier, sales for plug-in vehicles are actually double that of the same period in 2012. These incentives have gone far in making that possible.
One drawback to such programs is the some of them—like Fiat’s Fiat 500EV offering—are available on a state-by-state basis. The Fiat 500EV, for example, is only offered in California, specifically to help that state meet emissions standards.
Leasing is an interesting option that is gaining traction in the minds of consumers. I mentioned that the domestic EV market isn’t doing that well for several reasons. One of the biggest reasons is the high upfront cost. The Tesla Model S is an extreme example, but it illustrates the point well. To go electric, you’d need to shell out close to $80,000 or so.
Leasing offers a way out of that problem. And the incentives offered at the federal and state level bring the already-lower cost of leasing down even further. If you’re in Georgia, you basically get to use the Nissan Leaf for two years for just $2,000 (plus charging costs). That arrangement has already helped Nissan.
Tesla’s good news
Meanwhile, Tesla continues to ride high despite its relative inaccessibility. A lot of that is due to the good PR the company and its head, Elon Musk, have maintained. Just recently, for example, Tesla successfully repaid $451.8 million that the U.S. Department of Energy had loaned the company. The best part? Tesla repaid this loan nine years early. This came hard on the heels of Tesla announcing early this year that it would shortly present its first ever profitable quarter, marking an increase of 83 percent over the quarter just past. Let’s recall that in 2012, both Mitt Romney and Sarah Palin disparaged Tesla as being a drain on taxpayer resources. Well, then.
Certainly, the success of the Model S—it has a superb range and scored high on nearly all automotive tests—has buttressed the company’s good PR tactics. And even more recently, Tesla’s stock shot up. Good karma begets good karma (this does not apply if you are Fisker Automotive, unfortunately).
Should you be considering investing in Tesla right now, though, wait a while longer. The recent flurry of positive news has sent Tesla up high—too high, in all probability. It’ll settle down in a bit, which would be a good time to join the Tesla cheerleading team.