Can Fleets Benefit From Used Electric Cars?

 In EV Industry, Green Fleet

The electric vehicle market is poised for major changes as the next generation is set to launch. When it arrives, beginning with the Chevy Bolt EV in late 2016, the range standard will start at 200 miles for cars outside of the luxury class.

In the meantime, a growing inventory of first-generation EVs are making their way to the used auto market, where three of the primary barriers to electric car adoption are gone. Fleet owners don’t have to concern themselves with:

  • High sticker prices
  • Incentive tracking
  • Expectations of battery degradation

However, old concerns about range still exist, as do issues about longevity and what happens if battery replacement needed. Fleet owners have to approach used EVs from several angles.

P.S. we’ll soon be putting out an in-depth report on battery degradation from the data of the thousands of electric vehicles we’ve tracked. Subscribe to our blog to make sure you don’t miss it.

Surveying the Inventory

Used Chevy Volt

Including compliance cars available only in California, nine different plug-in models were available as early as 2012. Among all-electric vehicles, the Nissan Leaf has sold the most in North America, while the Chevy Volt has been the plug-in hybrid on the road in the largest numbers. As you survey used inventory, these models dominate the scene.

Fleet owners should be aware of the changes between different model years for these vehicles, beginning with the Nissan Leaf.

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  • Prior to the 2013 model year, Leaf had a 99 MPGe rating and range of 73 miles. A 15% improvement took effect that year.
  • Beginning in the 2015 model year, Nissan added heat-resistant technology to the car’s battery pack, making it hold its range better in extreme weather
  • Battery replacement is available and requires retrofitting with models before 2013.

With these guidelines in mind, fleet owners can begin surveying the available models. An impressive used inventory exists in Southern California, with dozens of Leafs under $10,000, less than half the net price after incentives. Other low-priced used EVs include the Mitsubishi i-MiEV, Ford Focus Electric, and Fiat 500e.

Chevy Volt, which debuted with 35 miles of electric range in the 2011 model, appears on the used market starting at $12,000. The 38-mile Volt entered the market in the 2013 model year.

BMW i3, which launched in the 2014 model year, has its low end in the market around $24,000.

Tesla Model S and Tesla Roadster appear on the used market at $50,000 and above. Fisker Karma, a plug-in hybrid, is in this high-end segment as well.

Understanding Battery Degradation

Used Fiat 500e

When electric vehicles first appeared, concerns about their batteries becoming useless after a few years were rampant. As you shop on the used market, you can see these claims were false. However, EV batteries do lose some of their power over years of use, though the margin is typically between 10% and 15% of the original range.

In a car like the Ford Focus Electric (76 miles) or Mitsubishi i-MiEV (62 miles), 15% can be significant, so these levels should be checked during test drives. Charging times are also affected, as the battery begins to resist the electricity from the power source. Fleet owners have to consider time plugged in as well as the reduction in range while on the road.

Even fast-charging will become more complicated. While a new Leaf would take 30 minutes to get an 80% charge, a model that has lost battery power would take 40 minutes to get the same percentage, though the range will be lower.

In the case of Tesla, a survey of nearly 500 Model S owners showed about 5% battery loss in the first 50,000 miles of operation.

Overcoming Range Anxiety

Tesla Model S

Range anxiety has always been a factor with small-battery EVs, and the drop in range that occurs naturally after years of operation could make their integration impossible for some fleet tasks. However, this issue highlights the importance of matching the right plug-in vehicle to your needs as a business.

General guidelines include:

  • Choosing plug-in hybrids for longer-range travel
  • Acknowledging limited access to charging stations
  • Charging only when electricity prices are low
  • Having enough cargo capacity for the job

Because electric driving offers the best return on a fleet investment, you want to maximize this feature of plug-in hybrids, being careful to avoid leaning on the gas engine for long. Even with used models, the Chevy Volt commands a premium over pure EVs and gasoline cars.

Since Model S battery loss has been the least significant, fleet owners with the need for a premium, more spacious EV can find the best range in this vehicle.

Upgrading Battery Packs

Fleet of BMW i3's

In addition to managing these elements of performance, fleet owners can consider upgrading battery packs. A new pack for the Nissan Leaf costs $5,499 when turning in the old battery. Finding a cheap used Leaf and switching out the battery may prove to be a better deal than buying a new model if 84 miles of range is enough.

BMW has begun offering a battery upgrade for drivers of the i3 as well. When the automaker announced its new battery would increase capacity 50% in the same size pack, owners began to envision what they could do with 113 miles of range. (Nissan Leaf SV, currently the longest-range EV in the small-car class, offers 107 miles.) However, this upgrade will cost upwards of $8,000.

Drawbacks to the Used EV Market

While fleet owners may see terrific prices on used electric cars in 2016, there are potential drawbacks to consider. Before you buy used, consider these factors:

  • New EV technology arriving in the Chevy Bolt and Tesla Model 3 may be far superior to any model currently available.
  • An increase in local incentives, as seen in New York state in 2016, could make the cost of a new EV almost as reasonable when you factor in battery upgrades.
  • Older models will require vigilance if you hope to maximize electric miles.
  • The first generation is entering uncharted territory as the early models pass five years on the road.

Prices on used electric cars make them appealing for fleet owners who want to green their vehicle lineup and save money on fueling and maintenance. If you have a system in place to monitor battery health and ensure you get the most out of older plug-ins, they could make sense for your fleet now.

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