People have been conditioned to want a new car every 3 years. That is the main reason. Some people also treat their cars like crap and it shows.
Honda Fit EV Faces Tough ROI Arguments
Though Honda will only lease the Fit EV, it's been revealed that the converted electric has an MSRP of $36,625.
While Honda is focusing on how its 2013 Fit EV trumps the competition in MPGe and range, critics and competitors point out that the Fit EV's price point is out of whack.
When basing an electric vehicle on a conventional gasoline-fueled model, return on investment arguments are inevitable (even if they seldom represent apples-to-apples comparisons). Here's how the story plays out for the Fit: though Honda will only lease the Fit EV, the converted electric has an MSRP basis of $29,125. That price includes the federal government's $7,500 tax credit, which means that the actual MSRP of the Honda Fit EV is $36,625. Meanwhile, the conventional Fit is one of the most economical cars on the road, with a MSRP range from $15,325 to $19,690, dependent upon trim level.
So the argument goes that the electric Fit costs at least twice as much as its conventional counterpart. According to USA Today, the average driver (13,500 miles per year) would spend $445 to "fuel" (28.6 kilowatt hours per 100 miles at 11.6 cents per kilowatt hour) the electric Fit per year. On the flip side, a conventional Fit (31 miles per gallon) would cost approximately $1,552 to fuel per year. That works out to an annual savings of $1,107 in favor of the Fit EV. But due to its up-front cost, the payback period for the Fit EV (as compared to the conventional Fit) works out to be 11 years. Given that the average new vehicle is owned for less than 6 years, choosing the Fit EV over its conventional counterpart isn't a wise financial decision. Of course, that's not the main driving force behind most buyers' decisions to purchase an electric vehicle. However, as automakers begin to eye the mainstream public, electric vehicles will have to operate on better financial terms when compared to conventional vehicles.
Perhaps a more useful price comparison for now is between the Fit EV and the Nissan LEAF ($35,200 to $37,250), Mitsubishi i ($29,125 to $31,125) and Ford Focus Electric ($39,995). However, the Fit EV will be produced in very low numbers and is the only vehicle in this group to be offered on a lease-only basis.
Comments
· goldenfooler (not verified) · 2 years ago
· Benjamin Nead · 2 years ago
This is something that's been brought up here before. Ever since sales of Henry Ford's Model T began to slip in face of competition, the concept of planned obsolescence has been a part of automobile marketing. We've been conditioned by the OEMs for decades to only drive the new purchase for a few years. Some of us resist, simply because it's too expensive to be perpetually making car payments over a lifetime. Although my well-worn '95 Saturn doesn't have any bumper stickers, I'd proudly adorn one of those "Don't laugh, it's paid for" items.
Regarding the Honda Fit EV: I've been surprised by the number of people I've run into lately (not folks who could be classified as EV news junkies, but know that I am,) who've been intrigued by this one. When I inform them that they probably won't be even able to buy - or even rent it locally - they seem discouraged.
Discounting ICE range extender vehicles, the only real-world available/affordable EV in the U.S. right now is the Nissan Leaf. Mitsubishi's i is on the horizon, Ford' Focus EV is hopefully not far behind and Telsas will eventually offer something in this price range . . . but every other manufacturer who's offering EVs right now is crafting them from high quality unotanium.
As for the whole ROI argument regarding ICE vs. EV versions of any given car, please invite true believers of the ICE version to take them - with full tank of gasoline - into a sealed garage and stay there with the car idling until it runs dry. We'll do the same with the EV version and then, if the ICE adherents are still alive after the experiment, we'll compare notes. You get what you pay for.
· Anonymous (not verified) · 2 years ago
"Of course, that's not the main driving force behind most buyers' decisions to purchase an electric vehicle."
That's right. So why do you keep talking about RIO??
When I bought a Prius, I thought about ROI as much as someone else thinks about it when upgrading to leather. What's the ROI for leather? Or an automatic ? Or a V-8? Or a Cadillac?
To me the discussion of ROI feels like a bogus argument presented by people with biases against the new technologies.
· KeiJidosha · 2 years ago
With better range, faster charger, better looks, and sportier performance than the LEAF, the Fit EV is an attractive offering. As you point out, MSRP is a dart board number, that ended up sensibly placed between the LEAF and Focus. Higher mileage or higher gas prices would shorten ROI. Either, neither, or both could happen. For constrained market of 1,100 units, it’s just an academic argument that only has to work for the lessee.
· Anonymous (not verified) · 2 years ago
Why lease only though, seriously this EV has SCIB batteries which will last for 15 years.
So in theory you could buy this and drive it for 15 years, and the only maintenance you will need is to change the brakes and tires.
Maybe thats why they dont want us to be able to buy it?
· Xebra driver · 2 years ago
What is even the point of doing an ROI on a lease only model?
Since the Fit-EV is only offered as a 2 year lease, the only legitimate comparison would be a 2 year lease on the gas model. Going to the honda website, the monthly lease payment for the EV is $389/mo and for the gas version is $ 375/mo. So if it saves $14 a month in fuel, it pays for itself right?
I'm being facetious of course, but what is the point of doing these calculations based on conditions that will never happen.
I've also never seen the point of pretending that a car that will never be sold has a price, It's just an arbitrary number.
· Priusmaniac · 2 years ago
In Brussels where gasoline is at 9.40 $/Gallon, the ROI of a FIT EV would be competitive with a standard gasoline FIT. You would save 4000 $ a year. So only four years are necessary to recoup your investment. The obstacle here is that many people don’t want an EV without a range extender and those except for the 60000 $ local price Volt, are not available.
· Future ER'er (not verified) · 2 years ago
The one thing that I rarely see included in these "ROI" calculations is the maintenance that doesn't have to happen with an EV. Let's include the oil changes, filter replacements, radiator flushes, etc that aren't part of the EV equation.That 11 years would get a bit shorter. And I would second the comment about the ROI on leather trim or an upgraded entertainment system that in some cases amounts to over $2000. When my current vehicle finally gives up the ghost (another 8 years or so), I'm looking forward to new generations of technology that make this whole argument a thing of the past.
· Brian Schwerdt · 2 years ago
@Xebra driver: "Going to the honda website, the monthly lease payment for the EV is $389/mo and for the gas version is $ 375/mo. So if it saves $14 a month in fuel, it pays for itself right?"
I didn't believe your numbers at first, so I went to Honda's website myself. Sure enough, for a 24 month lease, the gas version is right where you said it is. Now I'm wondering why nobody is using this measure of comparison? It seems blatantly obvious and impossible to argue. The FIT EV is absolutely cheaper to own/operate than the gas version when comparing apples-to-apples (i.e. 24 month lease).
· Anonymous (not verified) · 2 years ago
Hi all. Note that the up front cost of the car is being compared to the up front cost of the gasoline for the gas model. I expect gas to be quite a bit more expensive over the life of the car, while electricity costs will likely go up at a lower rate. It is unclear if we will have actual oil shortages since these do not seem to be required to force up prices. Electricity shortages seem even more unlikely in the US at least. I would bet on electricity to provide a more reliable and more stable cost of ownership. And the wear mechanisms for the electric vehicle should give us a longer and more reliable lifetime.
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"Given that the average new vehicle is owned for less than 6 years"
And that, right there, is the problem in a nutshell. Why do people ditch their cars after 6 years, on average? Serious question. I would like to know the reasons people have. The closest I can come to an answer (without spending all day on this, anyway) is here. "Top 14 Reasons People Buy New Cars"
Not to read too deeply into this... "Old car was always in for repairs" was cited by 20% of people. It's not that EVs can never break down but it strikes me that this will be much less common an answer.
("Wanted a car with better gas mileage" doesn't really apply but I suppose you could swap that for "car with better range."
What I'm getting at is I suspect EV owners would be more likely to keep their cars longer, on average, which makes ROI more difficult to consider. By how much; I'm in no position to say...