Posted in: Cars,
by Gregg Laskoski on May 17, 2013 06:00 AM
Anybody who's looked at electric vehicles and follows the news knows that one of the big obstacles that steers buyers away has been concern about the sometimes diminishing performance of the EV batteries, and, their inability to hold a charge for as long as advertised...
Smart USA has come up with a novel solution to alleviate those concerns.
According to AutoNews.com, Smart is now allowing buyers and lessees to rent the battery -- and lower the purchase price or monthly leases -- in the ForTwo Electric Drive coupe that went on sale this week.
(For the moment, forget about the fact that an auto maker will rent its battery to the potential buyer as a way to discount the cost even if it undermines the perceived value of the product. Forget for the time being that this approach could do more harm than good.)
We know that there are many potential customers out there for whom an electric drive vehicle would be ideal but who have concerns about battery maintenance costs, battery life, repair cost, range anxiety and so on," said Smart CEO Mark Webster.
Buyers will pay $20,650 for the vehicle without the battery -- a savings of $5,100 from the $25,750 price for the EV with battery. The monthly battery rental is $80, plus taxes, and covers annual maintenance and replacement, if necessary. The battery is guaranteed for up to 10 years.
Lease customers pay $199 a month, with a down payment of $2,000 for capital cost reduction, with the battery rental included. The lease rate is low because the car's residual value is expected to be higher when the battery is replaced at lease end.
The rental contract for the battery can be transferred to a new owner for up to 10 years with no mileage restrictions.
While Mercedes expects most customers will choose the battery rental option, given its popularity in Europe, a traditional lease of $430 a month is also available.
The cost of owning a Smart Electric Drive goes down more for owners eligible for the $7,500 tax credit on EVs.
So what are the advantages if the battery is already covered under Smart's four-year/50,000 mile warranty? If battery efficiency goes below 80 percent, Smart will replace rather than repair it.
And Smart says there's another plus: "Should battery technology evolve to a new and better level from Daimler's joint venture Deutsche ACCUmotive, then owners can, with advance notice, switch their contract to the new battery pack without any change in the terms or rates of the contract."
The joint venture's battery will power the new Mercedes-Benz B-class Electric Drive car that goes on sale next year and will be the only plug-in electric wearing the three-point star. Smart is owned by Mercedes. The battery in the 2013 Smart ForTwo Electric Drive is supplied by Tesla Motors Inc.
of course, Smart expects most buyers to opt for the battery rental. Why not? All things considered, it's a deal.