Nissan Leaf Values Falling Fast

Nissan’s Leaf EV isn’t holding its value, according to dealers handling cars coming off lease. Range anxiety, battery worries and low fuel prices combine to depress EV resale prices.

Alysha Webb, Contributor

July 18, 2016

3 Min Read
Nissan Leafs coming off lease arenrsquot holding value
Nissan Leafs coming off lease aren’t holding value.

LOS ANGELES – As the first mass-produced electric vehicle, the Nissan Leaf was a pioneer. To overcome consumer qualms about the new technology, Nissan offered attractive lease deals and moved a healthy volume.

Now that those Leafs are coming off lease, however, the market for pre-owned EVs is weak. It is an issue likely to grow as more manufacturers begin to offer more battery-powered models.

“The values on the used-car market now that (Leafs) are coming back with lease returns aren’t super high and I’m not finding a lot of repeat customers,” Joe Sage, president of Sage Auto Group, tells WardsAuto.

The group, which includes three Nissan dealerships, is based in the San Fernando Valley area of Los Angeles. California has been the driving force behind growing EV sales, accounting for more than half of all plug-in electrics sold in the U.S. in 2015.

But even in California consumers worry about EV technology, specifically battery range. Sage tells of a celebrity customer who lives in Malibu and had to make a 37-mile (60-km) commute to Universal Studios.

They discussed how to conserve battery power, including driving habits and not running the air conditioner. Still, “he wasn’t comfortable with the range,” says Sage.

The ’13 Leaf offered 75 miles (121 km) of range with a 24-kWh battery. The ’14 and ’15 versions offered a slightly higher 84 miles (135 km), also with a 24-kWh battery.

A flood of Leafs will enter the pre-owned market in the next two years. In 2013, according to Kelley Blue Book, 22,610 Leafs were sold, and of those 86% were leased. In 2014, 30,200 units were sold, with an 83% leasing rate. The leasing rate slowed a bit in 2015, but so did sales, with 17,269 units sold and a 64% leasing rate.

Range anxiety – including the fact an EV’s battery range decreases over its lifetime – and low gas prices have pulled down Leaf wholesale auction prices, says Anil Goyal, senior vice president-automotive valuation and analytics at Black Book.

A ’13 Leaf retains only 23% of its original value at auction, according to Black Book. The ’14 model retains 30% and a ’15 holds 37%.

Those low values are likely to continue “as long as fuel prices are low and as long as there are range anxiety issues,” Goyal says.

Nissan North America is aware of the problem of low residual values and has taken steps to “enhance the value of the Leaf through the vehicle’s life-cycle,” spokesperson Paige Presley tells WardsAuto in an email.

That includes adding the Leaf to Nissan’s Certified Pre-Owned program and offering replacement battery packs. Nissan also is offering 0% financing for up to 60 months on CPO Leafs.

Putting a value on used EVs initially was a problem for online used-car retailer Beepi. It bought half a dozen Leafs at what it thought was the right price, Daniel Bilbao, vice president-business development, tells WardsAuto at the recent Thought Leadership Conference in Marina del Rey, CA. 

It offered the car on its site for what Beepi figured the car would sell, but lost $3,000 on each.

“The car wouldn’t move,” says Bilbao.

Beepi determined the problem was fear over the cost of replacing the battery.

The ’16 Leaf has a 30-kWh battery, and Nissan’s New Electric-Vehicle Limited Warranty protects against battery-capacity loss below nine bars of capacity for eight years or 100,000 miles (161,000 km) in a 30-kWh battery and five years or 60,000 miles (97,000 km) in the 24-kWh battery, says Presley.

The ’16 Leaf advertises 107 miles (172 km) of battery range.

Sage hopes the new, longer-range Leaf batteries will make the EV more palatable to his customers. He also figures new technology just takes some time for consumers to get used to.

“This is like the transition from cassette player to a CD player,” he says. “The fear for consumers is that they will buy technology that will become obsolete. Cars weren’t like that before.”

About the Author

Alysha Webb

Contributor

Based in Los Angeles, Alysha Webb has written about myriad aspects of the automotive industry for more than than two decades, including automotive retail, manufacturing, suppliers, and electric vehicles. She began her automotive journalism career in China and wrote reports for Wards Intelligence on China's electric vehicle future and China's autonomous vehicle future. 

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