Should Electric Vehicle Manufacturers Sell EVs Like Cell Phones? Is It Time to Upgrade?

4 years ago by Eric Loveday 3

One of the Oldest LEAF Images in Our Database...No, It's Not That Expensive Today.

One of the Oldest LEAF Images in Our Database…No, It’s Not That Expensive Today.

Time to upgrade?

Yes...I Believe It's Time for an Upgrade.

Yes…I Believe It’s Time for an Upgrade.

That’s the gist of an post presented last week by The Telgraph and we’d have to say we agree with some of the points made throughout the article, aptly titled “Why Electric Cars Could be Sold Like Phones.”

Emerging technologies develop so rapidly that it’s difficult to keep pace with the latest and greatest.  That’s why cell phone carriers offer reduced-price upgrades.  Most carriers offer some rendition of a new-every-two deal (eligible for a discounted phone upgrade every two years.)  Would a similar sort of setup work for electric vehicles?  We don’t see why not.

For those that demand the latest and greatest, leasing an electric vehicle is the way to go.  In this way, a two-year lease is already similar to the upgrade deal offer by cell phone carriers.

But the point The Telegraph is trying to make is different from that.  That article focuses on how the LEAF is offered in the UK

More specifically, The Telegraph says this:

“You can still buy the car outright, from £20,990, but a new “Flex” ownership plan means that buyers pay as little as £15,990 (after the £5,000 plug-in grant) up-front, and lease the battery separately from £70 per month, depending on the length of the contract and mileage covered.”

Which, of course, we’ve covered here before.

A $640 Phone for $199 or Less

A $640 Phone for $199 or Less

It’s that “Flex” option where buyers could theoretically purchase a LEAF and then “upgrade” the battery pack as the year’s pass by.  We say “theoretically” because there’s no guarantee that Nissan will offer upgraded batteries for the LEAF in the future, but the possibility at least exists.

The article in The Telegraph presents one more compelling point.  By offering this “Flex” option, more buyers can afford the technology packed LEAF, much in the same way that buyers can afford an iPhone because they aren’t charged full price up-front.  You see, cell phone providers also offer “new customer discounts” on purchases as a way to grow its membership base.  Then you’re sort of hooked.

Or, as Ismail Erturk, senior Manchester Business School lecturer, sort of explains:

How Much Will This Imaginary Phone Set You Back?

How Much Will This Imaginary Phone Set You Back?

“Anything which means a customer stays with a manufacturer for a period of time and trades up again is beneficial.”

And then professor Nigel Linge of Salford University, even adds:

“Mobile phones were called the ‘yuppy phone’ for good reason when they first came out. Unless you worked in the city, you couldn’t afford one.”

The same is sort of true of today’s electric vehicles, at least in terms of purchase price.  Most are rather expensive, which means that some buyers who may want one, don’t have the monetary means.  Again, Nissan’s “Flex” plan attempts to deal with this issue by reducing the up-front cost.  Renault too offers the Zoe in a similar buy vehicle/lease battery sort of way.

It’s not directly comparable to how cell phones are “sold,” but the methods and goals are much the same: Get buyers to buy something they typically couldn’t quite afford.  Will it work?

via The Telegraph

Tags: , , , , ,

3 responses to "Should Electric Vehicle Manufacturers Sell EVs Like Cell Phones? Is It Time to Upgrade?"

  1. Anthony says:

    The problem with this approach is that batteries don’t advance as fast as the CPUs and RF chips in smartphones, and aren’t as prone to breakage. If batteries for EVs were advancing at 20% per year, I could understand using this plan now, because in 5 years you might still want the car, but a new battery that gets more than double the range. But at 8-10% per year, you’re only going to get 40-50% range improvement (from 70 to 100 miles of EV range for a Leaf), assuming Nissan would even bother producing improved batteries for its older cars.

    1. Dave R says:

      While that is true, you also have to consider that your current battery will also degrade as well, so while batteries may only improve 8% per year, your current battery is degrading anywhere from 2-8% per year.

      Certainly upgrades every 2 years may be pushing it, but not if the old batteries are reused for 2nd life applications like grid storage so that the cost of an upgrade is nominal.

      Certainly I see a very good potential market for upgrades at 5+ years out – by that time your pack will be 10-25% down on capacity while the latest batteries should be up to 25% better than the original. For a LEAF with 75 mile range, you may be down to 55-60 miles range after 5 years – a 25% better than new battery would nearly double your range to 90-100 miles – a worthy investment if the rest of the car also holds up well.

      1. vdiv says:

        Your reasoning explains rather well why “normal” people are hesitant to buy EVs. All one has to do though is replace the battery with a new/higher capacity one, not the entire car.