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Is There a Business Case for Electric-Car Battery Lease or Swap?

Jason Hendler December 22nd, 2010 By Jason Hendler Author December 22nd, 2010

December 22nd, 2010 As 2010 draws to a close, we now have shipments of the 2011 Nissan LEAF and the 2011 Chevy Volt to customers around the United States.  With the advent of these vehicles, is there still a business case for Better Place? To refresh your memory, Better Place is the venture between Shai Agassi and Renault-Nissan that proposes to sell electric cars without batteries, then lease the batteries to consumers and allow replacement for longer journeys through regional infrastructures of battery quick-swap stations. Nearly three years ago, Shai Agassi and Renault-Nissan announced their intent to launch Project Better Place, now known more simply as Better Place.  The business case they made then, was that batteries were years, maybe decades, from being able to meet the targets of cost (gasoline equivalent car), energy / power density (range - 300+ miles), long-life (10 years, no degradation) and rapid-rechargeability (5 – 15 minutes), demanded by consumers well acclimated to using gasoline cars.  By cheaply leasing batteries that could be quick-swapped within a regional base of battery swapping stations, all the shortcomings of existing battery technology would be mitigated for the customer, and managed by the lease holder. The 2011 Nissan LEAF SL has an MSRP of $33,720, before the federal tax credit of $7,500.  The EPA has given the Nissan LEAF an official range of 73 miles.  Although Nissan provides an 8-year, 100,000 mile warranty on the LEAF’s drive-train, battery and charging systems, they estimate that the battery should still maintain 80% of its capacity after five years of use, but it is not guaranteed.  As for charging, it takes about ~30 minutes to 80% at a 480 volt quick-charge station. Starting from a depleted battery, ~7 hours at 220/240V (depending on amperage), about 20 hours at 110/120V.  Nissan only offers 220 / 240V max for home units, so expect to charge most of the night to get your 73 miles of range. The 2011 Chevrolet Volt has a base MSRP of $40,280, before the federal tax credit of $7,500.  The EPA has given the Chevy Volt an official all electric range (AER) of 35 miles, but the gasoline range extender with 9.3 gallons fuel tank extends that range an additional 340 miles for a total of 375 miles of range.  The Volt also comes with an 8-year, 100,000 mile warranty on the battery, but the Volt maintains its overall range through the use computer algorithms to increase the  percent of battery used as the overall charge capacity of the battery declines.  As for charging, the Volt will be fully charged in about 10 hours at 120V, or in as little as 4 hours using a dedicated 240V line. Against the Better Place criteria laid out three years ago, the Nissan LEAF has not achieved the thresholds of costs, energy / power density (range), long-life or rapid rechargeability.  While the Chevy Volt does meet the thresholds of energy / power density (range), long-life and rapid rechargeability, it does so by using a gasoline range-extender, raising its base price approximately $7,000 higher than the Nissan LEAF and $18,000 above an equivalent gasoline only car. Although I expect major automakers to continuing offering and improving vehicles with respect to these targets, it appears that the LEAF and the Volt affirm Better Place’s business case, rather than threaten it.

 Renault Fluence ZE production electric sedan
Enlarge Photo

As 2010 draws to a close, we now have shipments of the 2011 Nissan LEAF and the 2011 Chevy Volt to customers around the United States.  With the advent of these vehicles, is there still a business case for Better Place?
To refresh your memory, Better Place is the venture between Shai Agassi and Renault-Nissan that proposes to sell electric cars without batteries, then lease the batteries to consumers and allow replacement for longer journeys through regional infrastructures of battery quick-swap stations.
Nearly three years ago, Shai Agassi and Renault-Nissan announced their intent to launch Project Better Place, now known more simply as Better Place.
The business case they made then, was that batteries were years, maybe decades, from being able to meet the targets of cost (gasoline equivalent car), energy / power density (range - 300+ miles), long-life (10 years, no degradation) and rapid-rechargeability (5 – 15 minutes), demanded by consumers well acclimated to using gasoline cars.
By cheaply leasing batteries that could be quick-swapped within a regional base of battery swapping stations, all the shortcomings of existing battery technology would be mitigated for the customer, and managed by the lease holder.

 2011 Nissan Leaf
Enlarge Photo

The 2011 Nissan LEAF SL has an MSRP of $33,720, before the federal tax credit of $7,500.  The EPA has given the Nissan LEAF an official range of 73 miles.
Although Nissan provides an 8-year, 100,000 mile warranty on the LEAF’s drive-train, battery and charging systems, they estimate that the battery should still maintain 80% of its capacity after five years of use, but it is not guaranteed.
As for charging, it takes about ~30 minutes to 80% at a 480 volt quick-charge station. Starting from a depleted battery, ~7 hours at 220/240V (depending on amperage), about 20 hours at 110/120V.  Nissan only offers 220 / 240V max for home units, so expect to charge most of the night to get your 73 miles of range.

 2011 Chevrolet Volt outside Detroit-Hamtramck assembly plant
Enlarge Photo

The 2011 Chevrolet Volt has a base MSRP of $40,280, before the federal tax credit of $7,500.  The EPA has given the Chevy Volt an official all electric range (AER) of 35 miles, but the gasoline range extender with 9.3 gallons fuel tank extends that range an additional 340 miles for a total of 375 miles of range.
The Volt also comes with an 8-year, 100,000 mile warranty on the battery, but the Volt maintains its overall range through the use computer algorithms to increase the  percent of battery used as the overall charge capacity of the battery declines.
As for charging, the Volt will be fully charged in about 10 hours at 120V, or in as little as 4 hours using a dedicated 240V line.
Against the Better Place criteria laid out three years ago, the Nissan LEAF has not achieved the thresholds of costs, energy / power density (range), long-life or rapid rechargeability.  While the Chevy Volt does meet the thresholds of energy / power density (range), long-life and rapid rechargeability, it does so by using a gasoline range-extender, raising its base price approximately $7,000 higher than the Nissan LEAF and $18,000 above an equivalent gasoline only car.
Although I expect major automakers to continuing offering and improving vehicles with respect to these targets, it appears that the LEAF and the Volt affirm Better Place’s business case, rather than threaten it.