At the beginning of this year, Bloomberg published this article talking about how the vast majority of electric car drivers lease, rather than own, their cars. The stats are as follows: In the US, about 80% of electric battery vehicles and about 55% of plug-in hybrids are leased, whereas only about 30% of all vehicles in the country are leased.
It is, however, important to note that the above doesn’t include any data points from Tesla. Since they sell their cars direct to customers, as opposed to through dealers, they have no obligation to publicly release this data. And so apparently they don’t.
Conventional wisdom suggests that if you plan to drive the same car for an extended period of time – the average age of a car on the road in the US is over 11 years – it makes financial sense to buy. But in this case, people seem to be worried about technological obsolescence and the weak resale market for electric vehicles. This may also speak to the type of customers who are currently buying electric vehicles; they are early adopters and don’t want old cars.
At the beginning of this year, Bloomberg published this article talking about how the vast majority of electric car drivers lease, rather than own, their cars. The stats are as follows: In the US, about 80% of electric battery vehicles and about 55% of plug-in hybrids are leased, whereas only about 30% of all vehicles in the country are leased.
It is, however, important to note that the above doesn’t include any data points from Tesla. Since they sell their cars direct to customers, as opposed to through dealers, they have no obligation to publicly release this data. And so apparently they don’t.
Conventional wisdom suggests that if you plan to drive the same car for an extended period of time – the average age of a car on the road in the US is over 11 years – it makes financial sense to buy. But in this case, people seem to be worried about technological obsolescence and the weak resale market for electric vehicles. This may also speak to the type of customers who are currently buying electric vehicles; they are early adopters and don’t want old cars.
I’ve also
seen someone argue
that because some states require a percentage of car sales to be zero electric vehicles, it can be more cost effective for manufacturers to sell/lease them at a loss than pay the penalties or buy the
. And with a lease, they at least get parts back at the end of the term. But I honestly don’t know much of a factor this plays.
I hadn’t thought of this before I stumbled across the Bloomberg article, but it all makes sense to me. I find this reversal in ownership interesting because it tells me that how we consume cars can very easily change, and probably will moving forward.
Below is a presentation by Frank Chen – head of research, deal, and investing at the venture firm Andreessen Horowitz – which makes the case for self-driving electric car fleets.
He starts the presentation by talking about why he thinks this shift is going to happen faster than most people think.
One reason for this is that the batteries are becoming dramatically cheaper and the battery makes up a large part of the cost. By 2025, it is expected that electric vehicles will become cost neutral with ICE (internal combustion engine) vehicles assuming zero government subsidies.
And by 2038, Bloomberg believes we will hit peak ICE vehicle sales. That is, electric vehicle and ICE vehicle sales globally will hit 50/50. Norway has already hit this threshold but they impose heavy financial penalties on ICE vehicles.
2025 is not that far away.
If you can’t see the presentation below, click here.
that because some states require a percentage of car sales to be zero electric vehicles, it can be more cost effective for manufacturers to sell/lease them at a loss than pay the penalties or buy the
. And with a lease, they at least get parts back at the end of the term. But I honestly don’t know much of a factor this plays.
I hadn’t thought of this before I stumbled across the Bloomberg article, but it all makes sense to me. I find this reversal in ownership interesting because it tells me that how we consume cars can very easily change, and probably will moving forward.
Below is a presentation by Frank Chen – head of research, deal, and investing at the venture firm Andreessen Horowitz – which makes the case for self-driving electric car fleets.
He starts the presentation by talking about why he thinks this shift is going to happen faster than most people think.
One reason for this is that the batteries are becoming dramatically cheaper and the battery makes up a large part of the cost. By 2025, it is expected that electric vehicles will become cost neutral with ICE (internal combustion engine) vehicles assuming zero government subsidies.
And by 2038, Bloomberg believes we will hit peak ICE vehicle sales. That is, electric vehicle and ICE vehicle sales globally will hit 50/50. Norway has already hit this threshold but they impose heavy financial penalties on ICE vehicles.
2025 is not that far away.
If you can’t see the presentation below, click here.
The Economist recently published an article called: How and why road-pricing will happen. If you’re a regular reader, you’ll know that there’s been lots of talk and support over the years on this blog for dynamic road pricing.
It’s politically unpopular, but it’s an incredibly rationale way to deal with traffic congestion.
In Singapore – home of the world’s first congestion charge zone (1975) – they constantly monitor traffic congestion. As soon as average speeds drop over a three-month period, they simply raise the charge. Congestion gone.
We know this works, but for many reasons road pricing is highly divisive. According to The Economist, there are a few reasons why this is going to become a bit more politically palatable.
For one, the take from gas taxes and vehicle duties has been declining in Britain over the past couple of years. Electric vehicles will only exacerbate this trend. So governments are going to be forced to look elsewhere for money.
These are cars circling around the city, picking up passengers. Blunt charges based on suburbanites entering the city in the morning and leaving in the afternoon is simply not capturing the way that many of us move around our cities today.
In other words, urban mobility is undergoing dramatic changes and the revenue and congestion management tools are going to need to adapt. If you’re interested in this topic, check out the full article here.
The Economist recently published an article called: How and why road-pricing will happen. If you’re a regular reader, you’ll know that there’s been lots of talk and support over the years on this blog for dynamic road pricing.
It’s politically unpopular, but it’s an incredibly rationale way to deal with traffic congestion.
In Singapore – home of the world’s first congestion charge zone (1975) – they constantly monitor traffic congestion. As soon as average speeds drop over a three-month period, they simply raise the charge. Congestion gone.
We know this works, but for many reasons road pricing is highly divisive. According to The Economist, there are a few reasons why this is going to become a bit more politically palatable.
For one, the take from gas taxes and vehicle duties has been declining in Britain over the past couple of years. Electric vehicles will only exacerbate this trend. So governments are going to be forced to look elsewhere for money.
These are cars circling around the city, picking up passengers. Blunt charges based on suburbanites entering the city in the morning and leaving in the afternoon is simply not capturing the way that many of us move around our cities today.
In other words, urban mobility is undergoing dramatic changes and the revenue and congestion management tools are going to need to adapt. If you’re interested in this topic, check out the full article here.
