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Leasing and Subscriptions for Electric Cars
297 Plays1 year ago
Welcome to the Plug In For More podcast! Mike, Tom, and Bryant are here to help you on your journey to an Electric vehicle future. Each episode we discuss current events, trends, and a specific topic of education related to EV's. We bring together a diverse experience set, and pair it with guests who are experts in the field. For even more information on EV's, check out www.EVUniverse.com.
In this episode the guys talk alternative purchase options for EVs. Most of us are familiar with tradition leasing options, but a new subscription model has emerged and we're taking a look at various options. Plus everything we know so far about the Kia EV9 and special loop hole to the EV tax credit.
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Transcript
Brian's Tech Mishap and Podcast Introduction
00:00:00
Speaker
All right, well welcome back to the plugin for more podcasts. Today we actually have a, Brian, thanks for joining us. You apparently just like to click things and turn yourself off. I do. I like, I have ADHD, I click everything. Random keystrokes. I don't even know what to say.
00:00:21
Speaker
I tried to turn off the startup shit on my laptop and close the wrong screen. That's right. I was like, oh, Brian's not going to be a part of this tonight. I just laughed. I had enough of this one. Brian's contribution. I showed up for 30 seconds. I'm out. Yeah, thanks. And this is all I need to do because I'm special.
00:00:44
Speaker
Welcome to Plug In For More, brought to you by EVUniverse.com. EVUniverse is your one-stop shop for all things related to the electric vehicle. Here on this podcast, our goal is to educate, inspire, and hopefully make your transition into the electric vehicle marketplace a lot less intimidating. And now, here are your hosts, Mike, Tom, and Bryant.
Kia EV9 Overview
00:01:11
Speaker
We had some news that the Kia EV9 is getting closer to being released. What can you tell us about that, Brian? I'm pretty excited. I've been talking about this ever since it's been debuted. As a starting price is $54,900, which I think is very reasonable. It's hard to compare this. I'll ask you in a quick second what you think. It's either the X or the Y. But I think the starting price is right in the middle.
00:01:40
Speaker
I think it's 215 horsepower, 258 pounds of torque. I think it gets cool reviews from me around the interior. Looks great. It's got three row seating. And it's got the 800 volt charging, fast charging, same as my EV6. And I really like the console. Everything about the interior, the exterior, it looks like a Telluride, but cooler, in my opinion.
00:02:08
Speaker
I can't wait to see it. It's got a lot of cargo space, 801 cubic feet. And then it can tow. It's a real SUV and like the EV6 is technically classified as an SUV. It's not. You're not going to tow with it, but it's got ground clearance of 7.8 inches and it can tow 5,000 pounds. Not like you're going to be towing the biggest thing in the world with it, but 5,000 pounds would tow my 21 foot boat. So what do you guys think?
00:02:34
Speaker
I mean, I think it's going to be a fantastic selling vehicle.
00:02:40
Speaker
When I look at this thing, it's the price point is is good. I mean, that's the fifty four nine is for rear wheel drive. So there's going to be a good segment of the country is going to want all wheel drive. But, you know, you look at the speed of charge, which is a very important thing. The amount of space that has I think that's a winning combination doesn't have a lot of power. So it's probably going to be a little slower than what a lot of people are used to for an EV, but it's still be plenty fast for what it's what it's really needed.
00:03:10
Speaker
I don't know. I think it's going to do really well. Yeah. And I like it. And after seeing the success of the EV6 and the platform that he is building this on, the 7C 3-row SUV is going to be huge. And I know that would be really desirable for me and my family. And my wife's already keying in on this particular car as well. So I'm going to be doing what I can to try to get my hands on it if possible.
Kia EV9 Tax Credit Eligibility
00:03:40
Speaker
The big question I would have is if it's going to qualify for tax credits. Yeah, I was going to go there. So it's being built in South Korea for now. They are planning and moving it though to the Georgia facility in West Point, Georgia. They key invested $200 million to upgrade that facility to start preparing the EV9 assembly next July. So then it would qualify for the, quote unquote, assembled in the United States.
00:04:03
Speaker
The only question really I have for Mike is, do you compare it against the Tesla Model Y, which starts at $50,400? Or is it more like the X? Typically, when I look at SUVs, I look at what the capability of it is. Because if you need a big SUV, you're not going to go for a Model Y because it just doesn't have the space. I mean, just the same reason I got rid of the Model Y is because I had a
00:04:29
Speaker
fairly large dog and then I've got two kids and then if we go on a long trip, we're packing that thing to the gills and it just wasn't meeting the needs anymore. Even though the price points are fairly close, it's just not going to work. I could have looked at, let's say Model X or Rivian R1S or if this thing was out, I would have looked at that too because it has the capabilities for what I need. I think the price point puts it more in line with a really
00:05:00
Speaker
attractive offer over a Model X. Now, is it gonna be as premium? No. It's gonna be as fast? No. But if it charges really fast and it has a, you know, a good range, which I think the range is a little bit lacking. I think we're talking like mid 200s, I think is a range. So that's, that's, that's the one and negative I see with the with the with the SUV with the EV nine is it just doesn't
00:05:29
Speaker
You can charge real fast, but it's charged a lot more frequently. So that's going to be a hit against it. Yeah, I would agree. The Model Y is kind
Leasing vs Buying EVs: Financial Implications
00:05:35
Speaker
of like an EB6 size. And this is bigger. I think to your point, the R1S is what, 80 mic? Yeah, so the Rivian R1S, so their three-row SUV, that starts at 78 for the dual motor.
00:05:51
Speaker
That's obviously more expensive when you add the quad or the large battery pack and that sort of thing. So end of the day, you're really looking at, for most people with the R1S, they're buying it today. In September of 2023, you're looking at right around minimum 85 for that. Yeah, so 30 grand. That's a big difference. It is. I'll be curious to see, though, with this EV9, though, what those price increases are as you up.
00:06:18
Speaker
the drive train and even trim to get on more of an apples to apples type comparison between the EV9 and the R1S. Yeah. And I also think when you look at the, like how well the Telluride has done for sales, I mean, this thing to me is just a better looking Telluride, that's an EV. And if that's the case, there's going to be a lot of interest on this thing. And aesthetically speaking, the headlights are far more attractive than the Rivian.
00:06:45
Speaker
I'm sorry, I didn't hear you and I don't want you to repeat yourself. I think to your point, they announced the trim levels. I think this is going to be key as trim levels for the future. They have the light long range. That's kind of a newer trim level I'm not familiar with, but they have the wind, which is the trim level I have, which is the all wheel drive.
00:07:04
Speaker
They announced the land. Again, I'm not super sure what that one is and the GT line. So like that's going to be the fast one, probably the dual motor, you know, zero to 60 in, you know, four seconds type of, type of vehicle. So yeah, we'll be curious to apples to apples, but for a rear wheel drive, three row EV Telluride, I think it's pretty attractive for 54. All right. So we're just talking about the EV nine, not qualifying for the tax credit. Cause it's not assembled in the United States.
00:07:32
Speaker
However, there is a loophole that's being discussed. You know, the dealerships have this loophole that they're talking more and more about. And basically the loophole is that the US Department of Treasury and its guidance for the Inflation Reduction Act said that commercial vehicles, quote unquote, commercial vehicles, most likely that's, you know, heavy duty trucks or, you know, semis or something like that would be exempt. But there's a loophole that says that if you lease a vehicle from the dealer,
00:08:02
Speaker
since technically you the end user doesn't take possession of the title, it stays in the dealer or the finance company's name, it is a commercial transaction and then the dealer could get the EV tax credit and pass it along to you. So maybe you could get the EV9 as a leased vehicle and get the tax credit, but Mike and Tom, what do you think about that loophole? That seems almost unbelievable, wouldn't you think so, Mike?
00:08:28
Speaker
I mean, it's the government, so I think it's believable. Anything can happen, folks. I think we all know that there's always loopholes and things that people forget to write into these things, and they do it on purpose one way or the other. There's loopholes in every piece of legislation. Yeah, I mean, to me, it's a little crazy.
00:08:52
Speaker
At the end of the day, if it gets more people into EVs, that's all I really care about. If it pushes more people into leasing, I really don't love that, just from the fact that leases typically are not financially the better option for people. There's times where it can be, but nine times out of 10, it's really more beneficial to purchase.
00:09:20
Speaker
Um, or, you know, take a loan out rather than lease, but, um, you know, there's instances where it, where it makes sense. You know, if you own a business or, and you can write some off some of the, the lease payments off or you change vehicles frequently, are you worried about this thing going out of, uh, kind of out of date being obsolete because it's the technology that makes sense. But anyways, I'm kind of going off on a tangent there. Ah, this is, I don't know. I don't know what to think at the moment. Um,
00:09:50
Speaker
Frankly, when Brian was first talking about this, I thought it was a bunch of baloney until we really got into it and started seeing where the loophole actually is. If it's true, it's true. I think a lot more people are going to lease certain vehicles just because of that. I have zero problem with it.
00:10:12
Speaker
And I think anything that will put money back in people's pockets and lower their payments to get into new vehicles regardless of their manufacturer location is good for everyone. That's probably a better way to put it.
00:10:26
Speaker
I would agree with your sentiment. I will say two things on this. One, since technically the institutions are the ones getting the tax credit, they don't have to give you the full value. So if you are going to lease a vehicle, make sure you're actually getting the full $7,500 or $3,750 because they could say you're getting it and they're giving you $500. So I'm not saying I don't trust dealerships, just make sure you're getting what you're talking about.
00:10:54
Speaker
I'd say number two is the cool part about this is you can take advantage of this tax credit loophole to pretty much get any mass-produced electric vehicle right now to qualify for the tax credit until a lot of these EVs have talked about moving their eligible factories over to United States or parts or whatever it is. So I think the list of EVs is going to grow that qualify, and we've already seen price reductions to qualify. But right now, this loophole, pretty much any EV qualifies.
00:11:24
Speaker
If you want an EV on the tax credit, go lease it. Yeah. And that gets you around the income limits as well. If you lease because you as the lease, lease or on that are not, uh, you know, subject to those income requirements. And if it's going to the commercial route, then you get around it. So yeah, lots, uh, a lot more people are going to qualify a lot more vehicles.
00:11:49
Speaker
Make sure you put my Venmo in the show notes, Tom, so people could send me some of their tax credit that they get back in these lease vehicles for finding this. Absolutely. I think we should keep drinking, guys. This might be the second most entertaining podcast, most being when Renee came on.
00:12:14
Speaker
That was pretty good. And while we have her come back in, why don't you do one?
Leasing and EV Subscription Options
00:12:27
Speaker
So that story about the leasing and the tax credits
00:12:40
Speaker
SEG was very nicely into our topic for the main part of the episode today on leasing or subscription services in electric vehicles. I'm going to throw it back to Mike on the leasing portion and his thoughts on if it's a good idea to lease an electric vehicle. Well, like I just mentioned, typically leasing is not the most financially beneficial for most people versus taking a loan out.
00:13:03
Speaker
with a low interest rate, but there's some caveats to that, of course. One is with a lot of EVs, they're not sure what the residual value is going to be. So that's different than what it has been in the past for a gas vehicle, where it was a little easier to tell what that residual value is going to be and so what your
00:13:22
Speaker
potential buyout would be or your monthly payment. With a lease vehicle, you're really paying for the depreciation of that vehicle. That's really what you're paying for and you're essentially betting on what that vehicle is going to be worth at the end of the lease. With EVs,
00:13:38
Speaker
Some manufacturers don't even allow you to keep the vehicle at the end, such as Tesla. They used to, but not any longer. So yeah, turn the vehicle back in, which for some people that might be a big thing and it might not be for others. Besides that, there's a couple of different things to keep in mind with EVs is that they are
00:14:01
Speaker
In newer technology, things are changing pretty frequently. There's going to be updates to the batteries. There's going to be updates to the motors. We're seeing that with Tesla constantly. They make updates to their vehicles throughout the year. So getting into the newest, the best technology, the longest range, it might make more sense to lease. So you're getting into the newest technology. And if that's something that matters to you, then maybe it's the right thing to do. If you're going to drive a car until it dies, then
00:14:30
Speaker
Buying one is going to be a better option than leasing than purchasing it outright. But at the end of the day, there's going to be very little difference for an electric vehicle versus a gas vehicle in terms of that lease arrangement. It's going to look the same. What you're getting at is the only unknown is just that residual value two or three years down the road.
00:14:51
Speaker
Yeah, I mean, yeah, exactly. So what you're used to with leasing with a gas car, it's going to be the same process with a EV. In the same breath as leasing, there's other options that are coming out with electric vehicles and the subscription model. Other options are coming out with this. I didn't understand. Maybe I should start over. Would you like me to use smaller words? I'm sorry. I'm sorry, Tom.
00:15:21
Speaker
Did you just get married a couple of weeks ago? I'm sorry. Are you taking your right to keep that part in? I don't. I probably really did sound stupid, so I can't. No, no, it is not stupid. Just I honestly, I didn't understand like the way you and I'm tired. So I mean, you might have said it appropriately. I was just like it just didn't didn't compute. So, God damn it.
00:15:48
Speaker
So in the same breath as leasing, we're also going to take a look at the subscription models when it comes to electric vehicles. Is that okay? Well, we're going to look at it. Or are we looking at it now or what are we looking at? From the research that I've done, the only auto manufacturer that's providing a subscription service for an electric vehicle is going to be Volvo and you can get their XC40 or the C40 with that.
00:16:18
Speaker
The cool thing about the subscription models is that you just have one monthly price that covers your cost of having the vehicle, that covers your insurance. There's no down payment associated with these types of agreements.
00:16:35
Speaker
And for example, like the Volvo C40 recharge is $915 a month, excluding taxes and fees. Well, by comparison for that same C40, if you're going to look at leasing it, you'd be looking at $485 a month. I don't know how much down, I would assume probably in the couple thousand dollars down, but.
00:16:57
Speaker
Yeah, I mean, so you're, you're almost doubling the price of subscription, which cover, I mean, your insurance maintenance and roadside assistance. I mean, those things are again, insurance that a lot of times they has roadside assistance bundled with it already. And then the maintenance is really not.
00:17:14
Speaker
not a whole lot and I don't think they're, I mean, don't quote me on this, we'd have to, you know, verify. I don't think in the fine print, you're going to see that the maintenance includes, you know, tires. Um, and other than that, the maintenance on EVs for the most part, you know, I mean, you do have the Audi e-trons that have some 20,000 mile maintenance that needs to get done, but there's most of them. It's really just putting in, um, windshield wiper fluid. I mean, you're,
00:17:42
Speaker
So that maintenance cost is next to nothing. You are able to get in and out of the subscriptions a lot easier than you would at least though. Yeah. So looking further into Volvo's website, the coverage with this includes the service, maintenance, wear and tear, vehicle tax, and more. That's what they worded as. So I would assume the wear and tear would be your tires.
00:18:11
Speaker
Yeah, but I wonder like, what are they going to say? It's, uh, you know, outside the ordinary and you're going to be paying for that.
00:18:20
Speaker
I don't know. It's 1,250 miles a month on the maintenance as well. Then there's this other company that is interesting that I get introduced to an Indianapolis area called Motor. Mike and I have had a relationship with them for a while now. It's trimotor.com. The interesting idea with how they're going about this subscription, is they're really thinking about,
00:18:49
Speaker
You know, maybe you want to try an EV with no long-term commitment. And so you don't even want to do a 36-month lease. You want to do maybe a one-month, see how it happens. So their subscription is really interesting. It's $649 a month. I'll get to the type of vehicles in a second. A down payment fee of $400, but they have insurance, roadside assistance.
00:19:14
Speaker
and charger installation, which is really interesting. They will find a local contractor and work with you to get it installed. Only a one month commitment and 1500 miles per month. So that's a really interesting thought. Like I said, we've had conversations and developed a relationship with these guys. What are your thoughts on what Motor is doing?
00:19:36
Speaker
Yeah, I mean, I think what motors doing that's really nice is really helping with the charging situation. You know, working with, you know, local utilities and that kind of thing to make sure that, you know, the whole process of getting into an EV is done very easily. And it's something that.
00:19:54
Speaker
You know, EV universe, we care a lot about, um, making the whole process of ownership. Very, very simple. So people know where to find their cars and, you know, get parts, accessories, that kind of thing. And that kind of fits in the same mold as what motors doing, um, making it easier for people to get the charging set up. They work with the installers. Um, you know, it's just one cost and then you're done. So I think the model that they have is great. Um, and I know they're expanding into other, um, areas of the country and I'm really excited for what they're doing. Um, I think it's a,
00:20:24
Speaker
It's a great model. It's a great crew of people that we've met over the last couple of years.
Current EV Market Trends
00:20:30
Speaker
And I think they've got a bright future. I know they've had some pretty significant investment. And I think it's pretty cool. Yeah, I do too. So the vehicles you can subscribe to are Tesla and Nissan Leaf or Mustang Mach-E, it looks like.
00:20:52
Speaker
And it's really a one-time sign-up. You just sign up in two minutes online, you pay the $400, and you get the vehicle and get a charger installed, and you're ready to rock and roll. And so I think some of the drawbacks here with the idea of the subscription model is that you're not going to have any equity at all. So you're just essentially throwing money away on a rental.
00:21:10
Speaker
And then you're going to limit your availability or your options for customization. If you wanted to add some cool accessories, you're not going to do that. Yeah, I would say going back to leasing and subscription, I am seeing quite a bit, specifically Lucid Air caught my eye. They're shooting me up all the ads online. Their lease office are pretty attractive. They've improved $100, $200 a month.
00:21:35
Speaker
depending on the trim level. And you're starting to see some manufacturers offer some incentives on leasing, in addition to obviously the purchase price. But as inventory is starting to crawl up a little bit with EVs, some of these incentives are actually pretty good. And like we talked about last episode, we'll see what the automaker strike does to inventory. But right now is not a bad time. The manufacturers are trying to sweeten the pot for some of these after years and years of waiting
00:22:04
Speaker
you know, they're not waiting, but adding to the MSRP, now it's starting to swing back into the buyers, kind of a buyer's market right now. Yeah. I mean, speaking of Lucidaire, I mean, the, the lease for that is right now there, there's an offer for 749 a month, um, almost 7,700 down at the lease signing, which is a lot, but, um, you know, compared to the Volvo subscription, I mean, that's, we're,
00:22:32
Speaker
talking $900 a month for that. I mean, don't get me wrong, the Volvo is a nice vehicle and all. The Lucid Air is another realm. Lucid Air is a far superior vehicle.
00:22:49
Speaker
Yeah. No one would, no one's going to, no one's going to lease a Volvo. I'm confident over a Lucid. I mean, maybe listener, if you make that decision, I want to hear from you. Please send me a note. That's the same price. I mean, heck, I even thought about leasing a Lucid for that. Honestly, I did. Cause I'm like, that's a heck of a car for seven bucks a month. That's negotiable tax credit, man. The tax credit wipes that out.
00:23:18
Speaker
Yeah, it's 82, it's 82.4, so it's over the limit. But yeah, I mean, maybe if you leased it, it'd be fine. Maybe. No, it wouldn't count. Same way as IKEA counts. Yeah. Well, would it count because it's over the MSRP? I don't know.
00:23:39
Speaker
I think all those, all those, every vehicles qualify as at least everyone. Yeah, so there you go. That'd be pretty sweet. Uh-oh. We know what's going to happen. No, Tom, don't we? Mike's going to get a loose.
Future EV Market Speculations
00:23:51
Speaker
You're going to get an EV. You're going to EV nine and Mike's going to get a loose.
00:23:57
Speaker
Here's my listener. Here's my future view here. There's no way Mike doesn't get a lucid at $700 a month. Mike is going to get a lucid. Mark my words. This is going to happen. No, no, I think I would. No, you wouldn't be able to talk to me ever again because I would be on the like in a river somewhere with like a concrete blocks around my ankles or something. I'd be dead.
00:24:28
Speaker
My wife's going to kill me. So I'm trying to say, Jesus, come on, Tom, stop looking at me like that. You know, I'm trying to say. So I just want to, one, thank you guys for the episode. As always, this has been entertaining and I want to congratulate Mike on going as long as he has without buying a new EV that he's told us about. That's true. How long has it been? It's been 35, 40 days. It's been like six months.
00:24:57
Speaker
60 days. Wow. That's good. Six months. Yeah, that's good. I'm getting the edge again. Oh, one update I do have, this is pretty important. So on the cyber trucks, I've got two or three orders, technically, the cyber truck because of the mistakes that happened on the original. Yeah, we talked about that earlier episode, but two of the three
00:25:24
Speaker
Um, when you go into the configurator, it looks like they're going to be ready, you know, available to configure fairly soon. So versus the other ones, again, because these are the first night reservations, we'll see if that pans out or if that was just an error on Tesla's part. My guess is that was not an error. So, um, more to come there and we can talk about the cyber truck, Tom's favorite looking vehicle, I think of all time. And, uh, yeah. Do we know how much it's going to cost you? No, no.
00:25:52
Speaker
not officially know they haven't come back out with the price or if it's going to have three motors or four, probably have three, but yeah, we'll see. That's fun. I mean, I want to wish, um, I want to congratulate Mike cause he did something with his Rivian to make it look like a truck he put.
00:26:08
Speaker
Cardboard boxes in the back. Does it look like is it cardboard boxes? What is that in the back of that? That is that is a whole bunch of actually plywood and Why would yes because I would scraps not enough full sheets. It doesn't look well. It looks like cardboard there No, but it looks like cardboard. Well, I know you need your eyes checked but I
00:26:30
Speaker
What I really like what that is is, again, plywood, it was a whole bunch of boxes from carbon fiber that came in from the manufacturer. So if you're looking for a model three or model Y carbon fiber, we've got it.
Episode Conclusion
00:26:42
Speaker
And a lot of really good quality stuff. Can we be done now? Congratulations. Enjoy. I think
00:26:50
Speaker
I think that was a good podcast. I can't wait to hear the editor. Thank you for listening to plug in for more. Make sure you subscribe so you don't miss any future episodes. In the meantime, check out the one stop EV marketplace, evuniverse.com. Until next time.