Automotive companies in the US have been told that they need to sell more electric vehicles, so companies like Honda are offering exceptional deals on their leases in order to push their EV sales numbers higher.
Honda has slashed the lease rate of it's Fit EV by one third to $259 per month in the U.S. down from $389 per month. They're even applying the new rate to existing leases. The three year lease terms include bonuses like no money down, unlimited mileage, free routine maintenance, collision insurance and a free 240 volt home charging station.
Hoping to boost sluggish electric car sales, automotive companies are slashing lease prices on their EVs and throwing in extra goodies. Citing factors such as range anxiety, few public charging stations and rising U.S. oil production resulting in stable pump prices, consumers have been reluctant to switch to electric vehicles.
Only 12,000 pure-electric vehicles were sold in the U.S. during the first four months of this year. That works out to less than 1% of the 4.97 million non-electric cars and trucks sold.
Automakers claim that they lose money on electric cars, due to the technology being so new and expensive batteries. Sergio Marchionne, Chrysler's CEO says that the company loses $10,000 on every Fiat 500 EV sold. Regardless, they continue to push the cars, often to satisfy regional regulations and quotes and increase competitive pressure at the same time. California requires that two percent of a manufacturer's sales be of electric vehicles, if they wish to sell cars in that state.
Honda says that their Fit EV is the most efficient five passenger car on the market, reaching a (combined) 118 MPG rating with a range of 82 miles or 132 km. With the current lease deals, a money losing proposition for the company, ownership is easily accessible. Last month, General motors said that they will lease their Spark EV for only $199 per month in California and Oregon. Honda is quick to point out that while other companies are also slashing lease rates to inflate their sales numbers, all of their competitors require a hefty down payment due at signing.
The cars can only be leased, rather than purchased outright, which makes sense. The car's batteries have a finite life, and nobody is really sure how long they will last. As the technology continues to improve, and prices fall, a limited commitment isn't a bad idea.
Honda's Fit EV is currently only available in a handful of states, and not yet in Canada.
By Linda Aylesworth - autoExpert.ca