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Nissan Leaf Fails The Test

December 19, 2014

By Paul Homewood

 

Nissan Leaf

 

 

 

With oil prices falling through the floor, and confirmation of just how much electricity prices are going to rise in the next few years, it is time to look again at the comparative costs of electric and conventional cars.

The Nissan Leaf seems to be the most popular electric car in the UK, and is comparable, from a specification point of view, to the Ford Focus. The Leaf Acenta is the mid range version, and can be compared with the Focus Zetec, which I have shown for both the 1.6 TDCi diesel and Eco 1.0 petrol options.

So first, some basic costs and specifications.

 

 

 

  Leaf Focus
1.6 TDCi
Focus
Eco 1.0
OTR Price £28590 £19395 £18295
Length mm 4445 4358  
Width mm 1770 1858  
Max Speed mph 87 120 115
0-62 mph seconds 11.5 10.8 12.5
Power Consumption Wh/km 150    
Fuel Consumption (Combined)
Litres/100km
  4.2 4.7

 

 

From this we can calculate annual running costs, based on 10,000 miles pa.

 

  Leaf Focus
1.6 TDCi
Focus
Eco 1.0
Electricity
pence per KWh
12.0    
Fuel
£/litre
  1.20 1.18
Fuel/Elec Cost pa 288 806 887
Maintenance 500 500 500
Depreciation 6945 3622 3580
Interest @ 5% 1430 970 915
Total Cost pa 9163 5898 5882

 

The following assumptions have been made:

1) The govt rebate of £5000 on the purchase price of the Leaf has been ignored, as this does not alter the cost of the car, but simply who ends up paying for it.

2) Similarly, differential rates of vehicle excise duty have been ignored.

3) No allowance is made for car insurance. I am not aware of any fundamental difference from model to model.

4) Nissan quote a cost of £500 for maintenance. While this seems steep for the Focus, I have assumed the same.

5) Again, Nissan quote a figure for depreciation, £20835 over 3 years, and on 10,000 miles pa. This tallies closely with Parkers Guide.

6) Depreciation figures for the Focus are based on Parkers Guide. (And slightly overstated, as based on 40,000 miles). To all intents and purposes, the second hand value of the Leaf is about the same as the Focus diesel, so the extra cost of purchase of the Nissan is lost to depreciation over three years.

It may be that the £5000 rebate is putting downward pressure on the second hand value, but it appears that there is not much appetite for second hand electric models. (Remember how few were being sold three years ago – as more come onto the second hand car market in the next few years, the price could weaken further).

 

So, in summary, there is no earthly way the Leaf can become anywhere competitive, from an economic point of view, at current cost levels, even if electricity was given away for nothing.

 

But, in reality, things are much, much worse for electric cars. Currently, fuel duty and VAT account for about 78 pence per litre on diesel and petrol. These taxes bring in more than £30bn a year in revenue, and if not paid by electric car drivers will simply have to be paid via other taxes. In other words, they are just as much a subsidy for electric cars as the £5000 rebate is.

If the government gets its way and switches most of us to electric cars over the next decade, it really will face enormous problems in replacing lost revenue, as none of the obvious alternatives would be remotely palatable:-

1) Tax electricity – unfair to non car owners, fuel poverty issues, etc.

2) Increase Vehicle Excise Duty – penalises low mileage drivers, and those still using petrol.

3) Increase other taxes, e.g. income tax or VAT.

4) The fairest way would be to tax electric car drivers directly, but this would discourage most people from buying them.

 

If we strip out fuel duty and VAT, we get the following comparison. (Electricity price currently is taxed at 5% VAT)

 

  Leaf Focus
1.6TDCi
Focus
Eco 1.0
Pence/KWh 11.4    
£/Litre   0.42 0.40
Fuel Cost pa 274 282 301
Total Running Cost 9149 5374 5296

 

In other words, when real fuel costs are taken into account, the supposed savings offered by the Leaf disappear.  

With likely increases in electricity prices of 25% in the next few years, the case for electric cars becomes ever less tenable. Meanwhile, the Committee on Climate Change want 1.7 million of them on the road by 2020, and the Lib Dims would like to banish petrol and diesels from the roads completely by 2040.

 

 

Sources

Nissan Specifications 

http://www.nissan.co.uk/GB/en/vehicle/electric-vehicles/leaf/prices-and-equipment/prices-and-specifications.html

 

Ford Specifications

http://www.ford.co.uk/Cars/Focus/Brochureandpricelists#primaryTabs

21 Comments
  1. Retired Dave permalink
    December 19, 2014 6:43 pm

    Well we already see the Demonisation of diesel vehicles taking place to create “a need” for electric vehicles. A number of engineers with the relevant experience and knowledge have already testified to the lack of a sound basis for this – even Dear Boris has already said London will effectively tax diesel out of the capital.

    Lets say government, over a couple of decades, makes electric the only choice. The amount of extra electricity generation required would be “substantial”. The cost of running an electric vehicle would be ramped up gradually as there is no way government could forgo the Road Tax income it receives now.

    • mkelly permalink
      December 19, 2014 7:27 pm

      Dear Boris has already said London will effectively tax diesel out of the capital.
      ===========

      Well how will people get all the heavy stuff in the city that diesel trucks used to haul after they have taxed diesel out of the city.

  2. Retired Dave permalink
    December 19, 2014 6:46 pm

    Hell Paul – I wish you had an edit button.

    I meant to say – The cost of running an electric vehicle would be ramped up gradually as there is no way government could forgo the road tax and fuel duty income it receives now.

  3. A C Osborn permalink
    December 19, 2014 6:48 pm

    Paul, you also forgot a couple of things.
    The Range of the cars, the Leaf falls way behind both petro & diesel and the cost of Replacement Batteries for the Leaf makes the Fuel consumption and cost of fuel on petrol and diesel cars look very very cheap.
    The average cost of servicing a Ford is about £150/annum with a bigger bill at 3 years of about £250.

  4. A C Osborn permalink
    December 19, 2014 6:51 pm

    Paul, you also forgot a couple of things.
    The Range of the cars, the Leaf falls way behind both petro & diesel and the cost of Replacement Batteries for the Leaf makes the Fuel consumption and cost of fuel on petrol and diesel cars look very very cheap.
    The average cost of servicing a Ford is about £150/annum with a bigger bill at 3 years of about £250.
    This may be a repeat, but I think the first version got binned.

    • December 19, 2014 7:01 pm

      Yes, I think one of the reasons second hand prices for the Leaf are so low is that people are worried the battery will go within a year or so.

  5. David Ashton permalink
    December 19, 2014 6:58 pm

    Hi Paul I’m a regular reader of your great blog but this is my first comment. I think the lost revenue from petrol/diesel will be replaced by road charging. Those who keep their petrol/diesel cars will pay twice.

  6. December 19, 2014 7:05 pm

    I also have a suspicion more pedestrians will be knocked over because electric cars make little noise.

  7. December 19, 2014 8:59 pm

    Two additional pertinent factors:

    1. Its range, with new batteries and minimal ‘extra’ power load (such as lights, windscreen wipers, rear-window heater & air con) is a measly 100 miles.

    2. When the batteries do pack up, (and Nissan will only warrant them for 5 years or 60,000 miles.) it’s ~£5k to replace them.

    http://www.autoexpress.co.uk/nissan/89694/nissan-leaf-battery-replacement-to-cost-4920

  8. manicbeancounter permalink
    December 19, 2014 9:34 pm

    Paul,
    You make a very useful analysis, and I hope my comment adds to it rather than detracts from it. Looking at the costs of motoring to the consumer, and the tax costs can be complex, so there are a couple of points that I would amend.
    First is that the £5000 rebate on an electric car is relevant to the buying decision. Otherwise it would not be in place. The purchaser of the car ends up paying £5000 less, so that is a reduction in both the depreciation and the borrowing they will face. As a result the annual cost differential on your figures reduces from £3200 to £1350. However, due to the differential in maintenance this figure is more like £1700.
    Second is the differente in tax revenue. New cars attract 20% VAT. For the Leaf this is £4750. After the rebate, the exchequer gives out £250. VAT on the focus Focus Diesel is about £3300. In 3 years, the net tax revenue on the Leaf (purchase price, 5% VAT on electricity, 20% VAT in maintenance) is £50. On both Fords it is £5100.
    The figures, by chance, fall out the same. Buy a Nissan Leaf instead of a Ford Focus and both you and the Exchequer will be about £5000 worse off over three years.
    The differences do not stop there. As AC Osborn rightly points out there is a problem with range. The Leaf is limited to about 100 miles before a recharge of over four hours. As such, for families, it becomes a second car, whereas the a Focus with a range of at least 400 miles and a five minute refill can both serve for the school run / daily commute and for longer trips as well. An electric car becomes more of a lifestyle car, so on cost is competing with an Audi A3 or similar.
    Kevin Marshall

    • December 19, 2014 9:52 pm

      But as I mentioned in point #2 above, replacement battery cost at ~£5k is both a real cost and a real risk to the (future) owner say 6-7 yrs down the line. That’s not £700 pa risk; but a huge imminent committment.

      People buy 6-7 year old cars ‘cos they can’t afford a new one; by definition, they’re unlikely to take a risk with a ‘leccy-car of that age.

      Also, that “100-mile” range: 5-6-7 years down the line, with the ‘fully-charged’ battery shows 9 out of the 12 bars on a very cold, wet winter’s evening, would you venture 25 miles knowing you had to return home to re-charge? Would a prospective buyer?

      • manicbeancounter permalink
        December 19, 2014 11:46 pm

        Joe,
        You are quite right on this. The limited battery life is a major risk. Further it detracts from electric cars being environmentally friendly. Much of the environmental impact (whether carbon emissions or genuine pollution) and cost is in the manufacture. Batteries full of noxious chemicals, so an electric car will be worse for the environment that a diesel or petrol. It will only gain financially or environmentally over a high mileage. But the battery will not last long enough, nor will the short range, make it a high mileage vehicle.

      • December 20, 2014 9:10 am

        There is a large group who run “bangers” by choice. 10+ year old cars can be picked up for relatively little, particularly larger models as opposed to first car models. These can be expected to run reliably for at least another 10 years, if maintained. The additional running costs are considerably less than the depreciation of a new car.

        The cost of a new battery would mean electric and hybrid cars would not be a worthwhile proposition for this group.

  9. manicbeancounter permalink
    December 19, 2014 9:53 pm

    Reblogged this on ManicBeancounter and commented:
    Paul Homewood has a very useful comparison between the cost of the electric Nissan Leaf car and a couple of super-efficient Ford Focuses. The electric car turns out to be a much worse buy. But looking at the costs of motoring to the consumer, and the tax costs can be complex, so there are a couple of points that I would amend.
    First is that the £5000 rebate on an electric car is relevant to the buying decision. Otherwise it would not be in place. The purchaser of the car ends up paying £5000 less, so that is a reduction in both the depreciation and the borrowing they will face. As a result the annual cost differential on your figures reduces from £3200 to £1350. However, due to the differential in maintenance this figure is more like £1700.
    Second is the difference in tax revenue. New cars attract 20% VAT. For the Leaf this is £4750. After the rebate, the exchequer gives out £250. VAT on the focus Focus Diesel is about £3300. In 3 years, the net tax revenue on the Leaf (purchase price, 5% VAT on electricity, 20% VAT in maintenance) is £50. On both Fords it is £5100.
    The figures, by chance, fall out the same. Buy a Nissan Leaf instead of a Ford Focus and both you and the Exchequer will be about £5000 worse off over three years.
    The differences do not stop there. As AC Osborn rightly points out there is a problem with range. The Leaf is limited to about 100 miles before a recharge of over four hours. As such, for families, it becomes a second car, whereas the a Focus with a range of at least 400 miles and a five minute refill can both serve for the school run / daily commute and for longer trips as well. An electric car becomes more of a lifestyle car, so on cost the Leaf is competing with an Audi A3 or similar.
    Kevin Marshall

    • Bloke down the pub permalink
      December 20, 2014 1:14 pm

      Hi MBC good to hear from you again. Elon Musk tweeted yesterday that the Tesla is now able to do a battery swap on the SF to LA route.

      This may come as a suprise to some as Tesla have been claiming state tax credits for ages based on this ability even though it was not available.

  10. December 20, 2014 9:51 am

    There are losses at every stage of energy conversion and some of these are often ignored by promoters of EV technology. For example, there is significant energy loss during the battery charging process, both in the inherent chemistry (hysteresis) and the charger circuit (electrical efficiency). These will likely add at least 15% to the electricity bill for running the car.

  11. A C Osborn permalink
    December 20, 2014 1:34 pm

    Hybrids make a lot more sense, but there is still Battery Replacment issue down the line, although perhaps less expensive as the pack is smaller.

  12. December 20, 2014 2:59 pm

    And did anyone mention what a poof you will look like driving one of these the dorky cars?

  13. December 20, 2014 3:12 pm

    Drake is right, you didn’t account for power losses upon charging. There’s also the idle loss but that’s very small.

    In any case, assuming 20% of electricity gets lost, the Leaf does not actually require 150Wh to move 1km, but 187Wh. So the before-tax price of electricity already exceeds that of diesel, at least in the UK (and Germany, and Denmark, and…).

    That’s assuming you charge at home, as public charging stations have to pay rent, overhead, etc. and thus usually cost more. Here in Spain, CHAdeMO charging is in fact more expensive than diesel and gasoline – after taxes!

  14. Kon Dealer permalink
    December 21, 2014 4:33 pm

    Good article in “The Times” Driving supplement today titled “The prezzies can wait; Santa has to charge up his sleigh”.

    This was the dismal story of a 280 mile drive from Sunderland to London in a Nissan Leaf.
    Just the seven stops for recharging. Total journey time 14 hrs and 18mins, giving an average speed of 25.3mph.

    And these bozos want us to drive these (expensive) heaps of junk?

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