Nissan LEAF – Scrunching the numbers

Does the Nissan LEAF actually save you money?

Click to download spreadsheet

Quick Answer – Yes, if the cost of Gas is above $2.86 and the government offers incentives to the tune of $10,000.

If it wasn’t for the Government incentives, the financial case for the EV doesn’t add up. They are simply too expensive without the incentives right now. Hopefully costs will come down over time, the incentives won’t last forever.

How I compared the LEAF to an equivalent Gas vehicle.

There are a number of factors I considered in figuring out if it would make financial sense to purchase a Nissan LEAF instead of a gas vehicle.

  • Fuel consumption of each vehicle – I used EPA “combined”numbers only.
  • Cost of Fuel – Gas vs Electric. This is where the savings are.
  • Free fill-ups – Stores have indicated they will offer free charging.
  • Depreciation – LEAF costs more, so will depreciate more.
  • Maintenance Costs – Fewer moving parts should mean lower costs.
  • Capital Cost – Paying cash? The LEAF costs more so you have less money to invest.
  • Financing Cost – Not paying cash? The LEAF’s higher price means higher interest payments.
  • Insurance Cost – Nissan claim it’s cheaper to insure, I checked it out.
  • Level 2 Charger Cost – Installing a charger in ones garage is recommended.
  • Government Incentives – In Tennessee up to $10,000 is available.
  • Taxes – The LEAF is pricey, so you pay more sales tax.

I created a spreadsheet to compare a similarly outfitted Nissan Versa against the LEAF and also the Chevy Volt. Feel free to download the Excel Spreadsheet.

Click to download spreadsheet

The number of miles one drives per year, ones insurance risk profile, not to mention the cost of gas and electric in ones region all make a huge difference in the outcome of the analysis. Update the values in the yellow shaded cells where appropriate to customize to your circumstances. If you are a Excel guru help me automate the break-even cost calculations which requires goalseek.

I am part of the EV project, so did not add the cost of a home charger. You can adjust the relevant parameter in the spreadsheet to match your expected costs.

Here are the assumptions I made during the preparation of the spreadsheet.

Click to Enlarge

Gas Vs Electric Calculations

I used EPA numbers, manufacturers see the world with rosy colored glasses. The EPA are hopefully a little more objective and calculate consumption consistently across brands. I used the “combined” fuel consumption figure where appropriate, I find that the combined number for the car I currently drive (A 2004 Chevy Classic) is close to what I get. The EPA combine the familiar city and highway numbers. It’s interesting to note that the LEAF’s numbers are better around the city versus the highway, the opposite of a conventional vehicle!!

The EPA have recently calculated a Miles Per Gallon equivalent for Electric cars to allow consumers to make a quick and easy comparison. I used both the MPG equivalent and the KwH/100 Miles normally quoted for electric vehicles. For the LEAF both the MPG and KwH/100 Miles numbers yielded very consistent results. For the Chevy Volt the numbers gave very different results. This tells me that the EPA haven’t got their hands around the true cost of hybrid-electric vehicles, but have for all-electric vehicles. So I feel confident that I have accurate numbers for the LEAF and Versa.

The EPA have also released what they feel is the real world range of the LEAF – 73 Miles compared the Nissan’s claim of 100. I found that most trips I typically take fall within 73 Miles, so am happy it will meet my needs in all driving conditions.

I also added a fudge factor for the % of free charges I believe I will be able to get at stores who offer free charging for EV’s. If your employer offers free charging, your percentage maybe close to 100% (Why charge at home if your employer will carry the cost?). For me I figured somewhere between 15-25%. Commercial charges will charge an empty LEAF in 30 Minutes. 10  minutes maybe enough to top it off during a shopping trip.

The bottom  line for me is that I’ll save about $1,100 per year on fuel over an equivalent gas vehicle such as a Versa and $1,300 over my current vehicle, a Chevy Classic.

Depreciation

Nissan offer a 8 Year/100,000 Miles warranty on the battery pack.  For reasons I’ll detail below, I believe the value of the LEAF will be close to zero once the warranty runs out. Used batteries are hazardous waste, the cost of disposing of them will probably equal the residual value of the vehicle. I assume in my calculations that I need to depreciate the entire net value of the vehicle over its lifetime. Another reason is that I typically keep cars for 6-9 years, I keep a car until it is worn out.

Initially Nissan weren’t going to offer such a long warranty on the batteries. This is in part in response to Chevy announcing a warranty on the Volt, Nissan had to stay competitive. Nissan have brought CVT transmissions to many of their gas vehicles. Due to the high cost of repairing these transmissions and a slew of customer complaints, Nissan recently applied retroactive long-term warranties to all CVT transmissions. Nissan’s willingness to offer the long warranty may be as a result of their learning experience with maintaining the new technology in CVT transmissions. They don’t want to spook customers away from something new, it will only take someone to tell you a horror story about how expensive the car is to repair to put you off the new technology for life.

Maintenance Costs

I still need to research maintenance costs. In my spreadsheet I put in a simple fudge factor to allow me to reduce or increase maintenance costs as a percentage. I have asked Nissan to provide me with maintenance schedules and anticipated costs. For now I have assumed a 25% savings in routine maintenance. The cost of tires, suspension, steering components won’t change. Brakes may be cheaper since regenerative braking should reduce wear on brake pads and discs. No oil changes, no fuel pumps to break. The LEAF does have coolant and a conventional 12-Volt battery, both which may need maintenance. I spend about $1,000 per vehicle per year on maintenance costs. I’ve kept a spreadsheet for the last 18 years for all my cars so feel the number is good for me. Your costs may vary.

I didn’t apply a cost adjustment for the Volt. I assume the costs will be the same as a gas vehicle. It has a gas engine as well as an electric motor/batteries.

Capital Cost / Finance Costs

Because the LEAF is relatively expensive to buy, (about double the cost of a similarly equipped Versa), money that could be earning interest in the bank, is now tied up in a depreciating asset. I calculated the lost interest payments on the difference between street prices of a LEAF and a Versa. Interest rates are low right  now, so the loss isn’t huge.

Instead of an outright purchase, the buyer may consider bank financing, due to the higher cost of the vehicle, the cumulative interest will be more.

In the spreadsheet I provided the ability to adjust the percentage of the car’s price financed from 0% up to 100%. In addition I provide a place to enter the loan rate that is available to you. I assumed 5.3% which is the current 60 month loan rate on bankrate.com for those with good credit.

Insurance Cost

I received insurance information from my agent, it took a little while to obtain, the LEAF isn’t in Nationwide’s computer systems yet!! The cost is $6 per month more than my Chevy Classic, about an 8% price increase, which is partly a function of a new vehicle vs a 7 year old vehicle. Put in your own values to the spreadsheet, my insurance risk and yours are likely to be very different.

Level 2 Charger Costs

It is desirable to have a Level 2 240volt charging station at your property if you own a LEAF. Prices range from $800 to $2200. You can put in the number you have been quoted. In my case it was $0 as I am a recipient of an EVProject grant which covers the cost of the charger and installation. The charger becomes mine after 2 years, in exchange I agree to supply data to the government so they can evaluate charging patterns.

An alternative to installing a Level 2 charger is to either use the Level 1 (L1) charger that comes with the vehicle. If you daily mileage is less than 25 miles this is a valid option.

Another alternative is to have the L1 charger converted to an L2 charger for less than $300 and have a 240v outlet installed close to where you park your vehicle. The whole project should cost less than $500. Check out http://evseupgrade.com/

Government Incentives.

I split the incentives between Federal and State. The Federal incentive of $7,500 is the same for all US customers. For cash or conventional loans the credit is paid in the following yers tax filing. For lease customers the $7,500 is deducted from the price in order to structure the lease payments at time of delivery. The State incentives vary by state, so put your states incentives in place of what I entered for Tennessee.

Tennessee only offer $2,500 to the first 1000 EV’s sold in Tennessee. Nissan won’t tell me how many vehicles have been sold in Tennessee. I don’t hold out much hope of the State telling me either. I run the numbers both with and without the State incentive.

Taxes

Because the purchase price is much higher, the high sales tax payable in Tennessee will eat into my potential savings. I figure the difference between taxes on a Versa and taxes on the LEAF. I should get a written quote in the next few days from my dealer to populate the spreadsheet with.

Flaws in the Spreadsheet

Electric cost not tied to gas cost. As the cost of oil increases so does the price of gas. The spreadseet shows how savings increase with an increase in the price of gas. However in the real world the price of electric will also inch up as oil goes up in price, many power stations are oil fired. The savings projections for potential future gas prices are therefore inflated. If someone knowledgable has a formula that would estimate the price increase for electric based on gas price, please let me know :-)

Capital Cost overstated I tried to estimate the loss of interest on the extra capital outlay for an EV. I did simple multiplication of the extra capital expense times an interest rate times the life of the vehicle. As savings in fuel are realized, this should be applied towards the capital principle reducing future interest loss. I’m not smart enough to know which formula to use to estimate this cost more accurately. If you do drop me a line :-)

This entry was posted in Cost Benefit, Electric Car, Nissan LEAF, Opinion and tagged , , , , , , , , , , , . Bookmark the permalink.

17 Responses to Nissan LEAF – Scrunching the numbers

  1. Danny says:

    JP. I know you’ve already selected the Leaf, but how about adding the Lexus hybrid to the comparison, since it costs about the same as the Prius and Volt:
    http://www.lexus.com/hybrids/#/models/CTh

    Maybe the fuel economy is lower, or there is higher maintenance, etc – so the TCO may still be higher, but it would be awesome to see that additional comparison.

    • jpwhitehome says:

      Danny,

      I don’t have reliable numbers for insurance or maintenance costs, so I made some guesses. The bottom line is that the Lexus doesn’t save you money. But then again it is a luxury car, and as such comparing it to the Nissan Versa isn’t doing it justice.

      I did update the spreadsheet. YMMV

  2. Pingback: Second LEAF on eBay Motors up for grabs. | Nissan LEAF

  3. fattmerris says:

    Increase in crude oil costs won’t affect electricity prices much at all since here in the US only 1% of electricity production comes from petroleum.

    • jpwhitehome says:

      Interesting. Where did you get that info? That makes the case for EV’s stronger :-)

      • wacojoe says:

        Hardly, the present Administration and the EPA has declared war on coal-fired electricity generation in favor of hugely more expensive wind-power and yet to be seen solar plants, all of which promises to escalate costs of electricity in the mid-term radically. $.10/kwh pricing of today will be fondly remembered if they get their way, which seems likely, as coal-fired plant closings have already been instituted.

    • jpwhitehome says:

      In Tennessee over the last 3 years as gas prices have gone up electric has increased from 7.5c per KwH to 9.5c per KwH. That’s a 30% increase. Gas of course has increased 300% or more. So maybe electric goes up at 10% the rate gas does?

      • wacojoe says:

        Tennessee is a special case with electricity costs because that area has historically reaped the benefits of relatively cheap hydro-electric power from the TRVA dams. It should be noted those dams are under attack for constraining the “natural flow” and ecology of water Gaia intended, and have an attentive ear in Washington D.C. Do you want the vagaries of wind-power to charge your ride?

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  6. Mike J. says:

    That Excel spreadsheet is awesome! Thanks!

  7. Pingback: overall cost of prius vs nissan leaf - Page 2 - Fuel Economy, Hypermiling, EcoModding News and Forum - EcoModder.com

  8. nobsartist says:

    I have been an automotive designer for about 40 years. 10 years ago while employed at ford as a studio engineer, I notified them of a patent that I owned that would improve pick up truck fuel economy by about 15% thru simple aerodynamic modifications. My suggestion was rejected and I was asked to leave.
    My patented modification would have paid for itself by saving 5 gallons of fuel per week. Multiply that by the number of pick up trucks sold yearly and it is easy to see that this would save substantial fuel every year. Plus the ROI would be quicker than anything alternative fuel vehicles can return.
    As an example, Chrysler just spent 1.5 BILLION on a new engine that returns ONE MILE PER GALLON FUEL SAVINGS. Our TAX dollars paid for that.
    My patented modification will soon be built in CHINA for sale in the U.S. with NO help from OUR governement (and NO U.S. JOBS CREATED).

  9. Pingback: Comparing Electric Cars To Gas Cars −EV Obsession

  10. Pingback: Price Of Electric Cars vs Price Of Gas Cars

  11. Pingback: UPDATED: Ford Focus Electric vs Ford Focus ST - Cleantech Reporter

  12. Pingback: UPDATED: Ford Focus Electric vs Ford Focus ST | AtisSun Solar Insider News

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