Buy the car and lease the battery?

<div class='quotetop'>QUOTE(Swanny1172 @ Aug 9 2007, 05:00 PM) [snapback]493231[/snapback]</div>

I can't see how that would be a good plan. I know that I would never buy a vehicle where you had to lease a required component. You would then be at the mercy of GM if you wanted to continue to drive the vehicle. You would only have two options:

Pay what ever GM wants for it's battery lease per month
Turn you car into a expensive piece of lawn art

However, this is the same thing that Think is talking about when they reintroduce their EV to the US.

 

I think the battery has quite a bit of value in the metals that are in them. They might also have enough juice in them to work for other applicaitons like safe computer power etc.

So I think GM in return for getting the battery back might be able to lower the price.

That said I have no real idea how much it would be worth?

/Robert

 

Simply the latest in a long string of BS schemes.
.
_H*

 

<div class='quotetop'>QUOTE(Swanny1172 @ Aug 9 2007, 06:12 PM) [snapback]493237[/snapback]</div>

From an accounting point of view there are two types of leases:

1. Operating lease
2. Financial lease

You can have an operating lease for as long as you want including as long as the life of the item. When you don't have the initial capital an operating lease could be the option. Personally I would never lease (except for a very short term requirement) unless it can be at least made tax deductible. As you correctly stated the battery is consumable and the car is a depreciating asset.

 

<div class='quotetop'>QUOTE(Prius 07 @ Aug 9 2007, 06:09 PM) [snapback]493304[/snapback]</div>

In US GAAP there is no financial lease. You may have meant a capital lease. Either one of these two leases is only from the perspective of the lessee. In US GAAP, SFAS 13 also lays out several different flavors of leases from the standpoint of the lessor: sales type lease, direct financing lease, operating lease and my favorite, the leveraged lease.

 

So when the lease is up and GM recalls all of their batteries.....you have to pay to crush your own car.

Brilliant. Simply brilliant.

 

<div class='quotetop'>QUOTE(Godiva @ Aug 9 2007, 08:43 PM) [snapback]493346[/snapback]</div>

LOL

 

The Prius did not undergo a whole lot of public ballyhoo vapor while
it was being developed. It stayed quietly in the skunk works until
it was ready, and was then shown to the public.
.
What's we're seeing about this Volt stuff speaks volumes -- volumes
that GM probably doesn't want us to hear.
.
_H*

 

<div class='quotetop'>QUOTE(hobbit @ Aug 9 2007, 06:07 PM) [snapback]493303[/snapback]</div>

It really does seem that way.... I guess that GM still doesn't 'get it'....

 

From the description this sounds as if the main reason for the lease is financial -- GM wants the apparent purchase price of the vehicle to be lower. (As opposed to leasing it as a form of warranty or to allow easy upgrade.) I think the Think was described the same way.

So GM's target market for the Volt consists of people who:

1) Are smart enough to want electric propulsion yet dumb enough to be fooled about the cost if you break their monthly payment into two pieces (loan and lease).
2) Want an EV-like car and believe GM will deal in good faith and support the EV portion of the car into the indefinite future.
3) Have no need to carry more than two adults (limited rear legroom) or bulky objects (no hatchback).

It all comes down to money. I read what clett has posted here about projected production cost at volume for the batteries, and either his sources are totally out to lunch (unlikely) or GM is just unwilling to make the investment here. They can't sell 10,000 of these profitably at a reasonable price, but they can sell 250,000. But they're not willing to take a loss on the first 10,000 to buy the potential market of 250,000. So they must judge that they have only a small chance of selling enough to get high profits at high volume, and hence, they are requiring the car to be priced so that it makes adequate profit at low volume. Minimizes their risk of loss, but I think it also minimizes their potential for gain. If Henry Ford had thought that way they would still be making cars by hand. And I think they are fundamentally wrong. This car, priced like a Prius, would be a category-killer urban commuter car. And GM just can't see that, I guess.

 

I think Chrysler/Dodge should build the EV car now since they are doing Lifetime powertrain warranty.
It would be cheaper on them if they were dealing with electric motors..

I think this gimmick will break the camels back again.. ready for another bailout


As for as the GM volt battery lease , just plain old talking smack, Very expensive lawn art as said prior.

 

<div class='quotetop'>QUOTE(chogan @ Aug 10 2007, 04:59 AM) [snapback]493465[/snapback]</div>

This sounds like the decision process that was used when GM made the original decision to forgo hybrids all over again:

1. We are not going to "eat" a $3,000 per unit premium on the initial production volume, and
2.) Gas will never get above $3.00 per gallon. Therefore, there is no market for the hybrid car....

Maybe GM should just let Toyota show them how the car business works one more time.... I am really starting to wonder if GM is just too far behind today's (and tomorrow's) market? Is there going to be another press conference in 5-7 years where management says its mea culpas about how who could have guessed that the market had changed... sound familiar????

 

<div class='quotetop'>QUOTE(efusco @ Aug 10 2007, 05:21 AM) [snapback]493468[/snapback]</div>

efusco, you make valid points; but the car business is not about doing the conservative thing. If that were the case, so much of the variety that car buyers are presented with would never have seen the light of day. The second gen (BMW) MINI comes to mind. At the time of its release, BMW was questioned about the viability of the concept. We all know what happened with the MINI. The same thing applies for the PHEV. Toyota proved the viability of the hybrid market segment. GM is trying to leap-frog Toyota but appears to be unwilling to make the necessary investment in the market segment. I just don't see how "lease the battery" gets them to the front of the line in the PHEV segment. Having a number of options ranging from outright purchase of the battery to lease the battery would have made more sense (and certainly would have been a better communication of GM's commitment to the segment). As others have posted, it just smacks of the EV-1 experience all over again.