The secondary electric car market isn’t holding its value as originally anticipated, so Nissan’s answer was to help reduce the LEAF's residual value and move the cars from lease to own. This thereby shifts the steeper than normal depreciation rate from Nissan to the now LEAF owners. The question is will this solidify the secondary EV market?
As an arm chair economist, I firmly believe that value is held in the prices one pays for the goods they purchase. At this point, the value of a Nissan LEAF is weighed by the current market availability and the anticipated future availability. As with the law of diffusion of innovation, EV sales are in the early adopter phase of the product life cycle. Consumers that are the early adopters most likely anticipated the battery improvements that have been evolving so opted to lease rather than buy their first Nissan Leafs. This leaves them open to the next generation EV which would be available in the future. As anticipated, that philosophy will be holding true and many Nissan LEAF leases will just give back their cars at the end of the lease and buy or lease a new EV. This is mostly because EVs with 200 mile range are coming.
So what is Nissan to do?
Can it develop a strategy to uphold the value of the secondary market Nissan Leafs? I believe it can. The published rate for a replacement Nissan LEAF battery pack is $5499 as previously published.
What if Nissan Retrofits 2011 LEAFs to 2016 Range?
Well, what if Nissan developed a kit, that would be able to be installed at the local dealers to retrofit 2011 to 2016 Nissan LEAFs with an add on battery that would push the Nissan LEAF cars on the road today up to the 200 miles range of the next version Leaf. Instead of a $5000 give back just on residual value, give back $5000 worth of batteries and keep the value of the overall used car higher?
There are many benefits to this.
- It would help solidify the used EV car market.
- It would help keep existing leases in the Nissan Family.
- It would drive future brand growth by word of mouth.
- It would increase publicity for the brand.