Battery leases make comeback; electric car conspiracy fans take note

Two start-ups are coming that will lease, rather than sell, batteries to consumers. Isn't this what big, bad GM did?

There are a lot of people who are convinced that established automakers and oil companies, along with some support from dealers, conspired together to kill electric cars back in the '90s.

One of the most repeated points they try to make is that General Motors only leased its EV1 electric car to consumers. The theory is that the lease existed so that GM could pull them back, in case people really liked the cars.

Ironically, two electric car start-ups are also going to put out their cars under leasing plans. Shai Agassi, a former SAP executive, has finally released some details. Under his plan, consumers will buy the car without a battery and then pay a monthly fee to lease batteries. Conceivably, car owners will pull up to a service station to get a battery swap. Some electric municipal buses already use swap-in batteries. (On a related note, including Shai's company, there are over 17 electric car companies , not including the motorcycle guys or established companies.)

Similarly, Think in Norway is going to try to come out with some cars this year in Norway and England. Consumers will buy the car but pay a monthly fee for the battery. The estimates are that the battery lease will come to around $100 to $150 a month.

Are these companies engaged in a conspiracy? If you are into grassy knoll thinking, this is really an inconvenient, unavoidable proposition. But the truth is, they face the same problems GM did. And the problem is this: batteries cost a lot. Adding batteries to a Prius to convert it to a plug-in hybrid runs about $10,000 to $15,000. At that rate, consumers will likely not regain the money they spend on the conversion in better mileage, Felix Kramer of CalCars, among others, have said. Tesla Motors is coming out with a $98,000 sports car, and a big part of the price is the battery pack.

A lot of companies are looking at coming out with electric sedans, but they will cost $50,000 to $80,000 and go about 150 miles before needing a charge. So twice as much as a Honda Accord, but not as flexible. Electric car and battery executives have pointed out that the cost-performance dilemma has been one of the major stumbling blocks to electric cars.

Don't get me wrong. Electrics and plug-ins will come to market and find willing customers. But consumers are going to have to think of their cars in different ways and learn to live with some trade-offs. Nissan, which wants to come out with electric cars in 2012, has said education is going to be a key part in pulling this off.

 

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