Is Nissan setting up a bad trend with buyout strategy?

[armmynissanleaf]

First it was 5K, they they went up to 7K. Here is why.

What Prices would you accept to buy your Nissan Leaf

[REMOVED]

 

[Elephanthead]

Well fair market value is a good price. They are just adjusting to what they get for the cars at auction. Why would anyone pay more should be the question. I knew the residual value Nissan was using was laughably high so I leased.

 

[SteveInSeattle]

Now that Nissan knows that resale values are low, their residuals have gone down on new leases and hence, lease prices up. Bottom line: If they don't offer the discounts off the residual then no one will buy their cars and they will lose even more at the auctions. As I stated elsewhere, had they offered me $6,000 instead of $4500, I would have bought my 2013 from them.

 

[Valdemar]

One question I have lately is how much longer before the Leaf is canned? That might actually help with resale prices.

 

[evnow]

One question I have lately is how much longer before the Leaf is canned? That might actually help with resale prices.

They won can Leaf. They'll come up with gen 2 that should hold the value better.

 

[Valdemar]

One question I have lately is how much longer before the Leaf is canned? That might actually help with resale prices.

They won can Leaf. They'll come up with gen 2 that should hold the value better.

People aren't exactly lining up to get EVs, longer range will help some but how much? Low gas prices aren't exactly helping. Sooner or later they will have to decide that enough is enough.

 

[Stanton]

One question I have lately is how much longer before the Leaf is canned? That might actually help with resale prices.

They won can Leaf. They'll come up with gen 2 that should hold the value better.

People aren't exactly lining up to get EVs, longer range will help some but how much? Low gas prices aren't exactly helping. Sooner or later they will have to decide that enough is enough.

EVs are here to stay...whether you like the Leaf or not. Personally, I think people will look back at the Leaf 20/30/40 years from now as a milestone in EV history, even moreso than the EV1 (since it was ultimately never SOLD to the public).

 

[beachfitrob]

I have mixed feelings about my 2011 SL I got for $16K with 8100 miles on it about 1 year and a half ago. Cheap at the time.

I've saved a ton of gas in the 27000 miles I put on it, figuring I save 4.6 cents a mile on gas vs. electricity alone. At least. $1242. Plus $50 on inspections, 4.5 oil changes times $40, etc.

Plus I've done a lot of 110V charging at work. My 40 miles commute back is generally paid for.


So figure out $2000 saved, putting me at $14,000 net cost, sort of. The problem is there is a 4BL 2011 almost just like mine for under $10,000 ASKING price in town, albeit with more miles.

Tough to make a numerical argument even if you drive a LOT but then your lease $$ changes with a lot of miles. I will be getting a new battery so that will add some value back.

HOPEFULLY the value will increase back a little bit like a bounce off the lows on many items when the cheap supplies dry up, especially when the new one comes out. The price will be high on it, so the cheaper gen 1's will be more attractive.

 

[kubel]

The buyout strategy is necessary to reduce inventory. Reduction of inventory is necessary because demand on used LEAFs is low. Demand is low because:

1) Government incentives make leasing/buying new more desirable, and makes demand on used LEAFs low. If you put $10,000 on the hood of every Mustang sold or leased, the used Mustang market would plummet. GM has managed to minimize this for leases at least, by tacking on the $7500 to the residual of the Volt, rather than reducing the cap cost. This artificially inflates the residual value, thereby making the lease cheaper. But when it comes to buy out, you get screwed.

2) The batteries suck. On top of that, Nissan has the *worst* battery capacity warranty in the industry (aside from those with no warranty at all). When you buy a used car that will require $5500 of maintenance in 1 or 2 years, you're going to expect at least some of that cost to be absorbed by the seller in the form of a cheaper asking price. The same is not true of manufacturers like Kia and Tesla- their warranties are substantially better, and I think it will show with higher residuals.

3) There's new technology around the corner, and not just battery range. Tesla has taken a good approach by making their cars as upgradable as the hardware allows. Nissan has chosen to side with yesterdays automotive industry by allowing their vehicles to stagnate 1 year before the car even starts rolling off the assembly line. EVs are a very geeky, early adopter field- and until manufacturers realize there's something different about their owners, they will produce a product that depreciates faster than their more innovative competitors.

 

[TomT]

I see no compelling argument or reason to believe this...

They won can Leaf. They'll come up with gen 2 that should hold the value better.

 

[mbender]

They won can Leaf.

Is there a typo here or am I missing something? :?

I do not understand what is meant, even though no one else seems to!

Oh, and more on-point: I look forward to Leaf 2.0, higher gas prices ;-) and "continued" exponential growth of the entire EV industry.

 

[jlsoaz]

First it was 5K, they they went up to 7K. Here is why.

What Prices would you accept to buy your Nissan Leaf

http://www.torquenews.com/3618/bad-idea-nissan-leaf-owners-7k-buyout-trend

I would not accept any prices. I fit into the category mentioned by one of the associated articles of looking to move on to a longer-range battery (or a PHEV).

One of the associated articles with this link suggested a kit for 2011-2016 Leafs to retrofit the vehicle with a longer-range battery. I don't know if this is possible, but it would increase the chance that I would consider buying the vehicle at lease end, depending on the price. Any sort of buyout is still unlikely considering the range of options and the multiple factors I would need to take into account in my individual case, but if, for the sake of argument, I was offered a retrofit of my leased Leaf that had 36 kWh of Lizard battery, improved attempted cooling (so the Lizard chemistry is not expected to overcome the stuffing of increased battery where it was never intended) and a realistic (not from Nissan's point of view, but from mine) price and financing, and some very clear and reasonable guarantee on future battery replacement costs and terms, then I would slightly consider it. There would still be some disadvantages, but it would give my vehicle an advantage over competing new equal range vehicles coming out with similar kWh in that it would help me see the light at the end of the tunnel in terms of getting off the financial merry-go-round of leasing or financing depreciation on a new car. The used Leafs have been out for longer, and some of us are waiting for a maturation of the used market in BEVs and PHEVs so we can buy at our usual moderate prices, finish payments, own the cars, and simply drive on, and not have to endure the comparatively wealthier household's expense of maintaining a separate car just for longer/faster trips. I will never buy a 24 kWh BEV but I will consider buying a 36 kWh used BEV.

 

[Valdemar]

EVs are here to stay...whether you like the Leaf or not.

It has nothing to do with my liking of the Leaf. New car sales suck, used car sales suck, batteries suck, public charging infrastructure sucks, out of warranty repairs are $$$$, federal incentives will run out, people are too smart to get into EV game for good reasons. Yes, the gen 2 is presumably coming out, but no one said it won't be another flop even if it makes it to market.

 

[jlsoaz]

EVs are here to stay...whether you like the Leaf or not.

It has nothing to do with my liking of the Leaf. New car sales suck, used car sales suck, batteries suck, public charging infrastructure sucks, out of warranty repairs are $$$$, federal incentives will run out, people are too smart to get into EV game for good reasons. Yes, the gen 2 is presumably coming out, but no one said it won't be another flop even if it makes it to market.

Hi Valdemar,

I think you're over-simplifying, just a bit.

earlier in the thread you also wrote:

People aren't exactly lining up to get EVs, longer range will help some but how much? Low gas prices aren't exactly helping. Sooner or later they will have to decide that enough is enough.

I agree low gas prices are a nasty headwind (in the US, though not as much in most other developed markets).
I agree there are (some) clouds on the horizon from a business sustainability analysis standpoint.
I have always thought (before I got my 2012 Leaf) that Nissan's choice to go with 24 kWh was a significant error, and it arguably left the door open for years of criticism and difficulty. If they failed to increase kWh then I think there would come a point where they'd have to throw in the towel, especially with competitors in addition to Tesla finally coming more into the picture and helping force the issue in the marketplace. I think correcting that error (now that there are more concrete signs they are moving on this), even very belatedly, will help the long-term sustainability of the Leaf, even with the drawbacks of lower gas prices in the US.
As to "lining up" to buy EVs, even in the US with our low gas prices, they are indeed doing so. There is a substantial wait-list for the upcoming Model X. There is probably not a wait-list for very low kWh BEVs such as the 24 kWh Leaf. An up-and-coming slightly improved kWh vehicle, the Soul BEV, is (I think) supply-constrained not demand-constrained.
Infrastructure - I don't see that many complaints about SuperChargers. I've had mixed experiences with some other infra, and do think your criticisms have at least some merit, but I have also had some ok experiences, and have seen some improvement (if painfully slow) in other areas.

I think it's a good idea to raise questions about the direction of the industry and individual companies, but I think your own initial points are broad-brush enough so that I would have to disagree on some things.

 

[Valdemar]

I think it is quite simple actually. It should be clear by now than Nissan is not making any profit on the Leaf. If Leaf 2 is released and it continues this trend, which seems to be likely, I seriously doubt we'll ever see Leaf 3.

 

[baustin]

I think it is quite simple actually. It should be clear by now than Nissan is not making any profit on the Leaf. If Leaf 2 is released and it continues this trend, which seems to be likely, I seriously doubt we'll ever see Leaf 3.

Nissan may not make a direct profit off the Leaf, but it allows them to sell more of the vehicles they currently profit from by raising the overall MPG rating of all the vehicles they sell here. Tesla is a driving force behind getting the BEV into the mainstream focus of the population. When the focus becomes clear, and BEV sales begin their rapid rise, Nissan will be riding the Tesla wave with a car the general public can afford.

The early adopters are the guinea pigs that give companies like Telsa and Nissan the ability to experiment, learn, and refine so that the BEV product line will eventually be a profitable one and not just the by-product of a governmental efficiency mandate. Higher profits will come later as the automakers use what they learn from the early generations to produce the 'must-have' Luxury BEV lines for the upper classes.

 

[mwalsh]

They won can Leaf.

Is there a typo here or am I missing something? :?

I do not understand what is meant, even though no one else seems to!

Predictive text on a mobile device. He meant to type "They won't can Leaf".

 

[TomT]

I think the Leaf is actually worth more to Nissan as emission credits than profits... It allows them to continue selling their behemoth gas vehicles which DO generate large profits...

I think it is quite simple actually. It should be clear by now than Nissan is not making any profit on the Leaf. If Leaf 2 is released and it continues this trend, which seems to be likely, I seriously doubt we'll ever see Leaf 3.

 

[Valdemar]

I think it is quite simple actually. It should be clear by now than Nissan is not making any profit on the Leaf. If Leaf 2 is released and it continues this trend, which seems to be likely, I seriously doubt we'll ever see Leaf 3.

Nissan may not make a direct profit off the Leaf, but it allows them to sell more of the vehicles they currently profit from by raising the overall MPG rating of all the vehicles they sell here. Tesla is a driving force behind getting the BEV into the mainstream focus of the population. When the focus becomes clear, and BEV sales begin their rapid rise, Nissan will be riding the Tesla wave with a car the general public can afford.

The early adopters are the guinea pigs that give companies like Telsa and Nissan the ability to experiment, learn, and refine so that the BEV product line will eventually be a profitable one and not just the by-product of a governmental efficiency mandate. Higher profits will come later as the automakers use what they learn from the early generations to produce the 'must-have' Luxury BEV lines for the upper classes.

That's one possible scenario. There are others too. Don't forget this is an artificial market created by the government, if it ceases to exist before EV's can become a self sustainable product so will the EVs, perhaps with the exception of those that are sold in the luxury segment.

 

[ydnas7]

I think the Leaf is actually worth more to Nissan as emission credits than profits... It allows them to continue selling their behemoth gas vehicles which DO generate large profits...

Thats a joke right?

Nissan (and Mitsubishi) made their EVs for the global market. Even Renault made their EVs for markets without emission credits. If Mitsubishi 's i was made for emission credits then its a massive failure, because only 2k were sold in USA compared to perhaps 40k worldwide.

Which car company got all the EVs sales in Georgia? The car company that is not in it for emission credits.

CAFE and fleet wide fuel economy targets - yes
CARB and ZEV credits -no