Is GM committed to manufacturing the Bolt in the Trump Era

[DucRider]

I'm not requesting that GM offer the same lease deal as Nissan has on the leftover 2016 Leafs. I'm requesting that they offer several different lease agreements, one of them geared towards people who need to lease first to be able to buy later. You can keep saying that EV leasing isn't different, but between the rapidly changing technology (especially regarding range) and the Federal incentive (which I would be working to have changed if it weren't so likely to just be eliminated soon) EV leasing is indeed different from typical ICE leasing. We'll just have to agree to disagree.

You seem to have it stuck in your head the GM Financial is the only option to lease the car, and that they have some sort of obligation to offer customized lease programs to fit a variety of needs. How many should they offer? Their current one and one that fits your exact needs? Or should they add other options as well?

If you don't like the GM Financial lease deal, there ARE other options. Your dealer likely has access to some, and Banks and Credit Unions are another source.

And remember, the lease does not obligate you to purchase the car. When the lease is up, there will be lots of Bolts on the market. If GM Financial does not offer an incentive to purchase the car at a reduced price, buy one of the others that will have been returned. Even if GM took another $5K off the residual and used it as a CCR, it is very likely that used Bolts would be available for less money than the agreed upon residual in a lease contract.

 

[WetEV]

it is very likely that used Bolts would be available for less money than the agreed upon residual in a lease contract.

Predictions are hard, especially about the future.

While unlikely, a serious carbon tax or a war in the Mideast might make gasoline crazy high, like $8 a gallon. Or inflation at 50% per year. Or ....

Your Bolt coming off lease might be a bargain.

 

[LeftieBiker]

The reason a lot of EV people want to buy the car after lease is that they will know how the car has been treated, and have used some of their payment total to buy some equity in the car. If the lease terms make buying the car less doable than looking for a used Bolt, then the high payments look doubly bad. Ducrider keeps implying that I want GM to write lease terms for me, specifically, but I think that most people reading what I write realize that what I'm asking is that GM write a lease for people, as a category, who want to eventually own their car, and can't qualify for the $7500 purchase credit. That doesn't seem to me like an unreasonable request.

 

[DucRider]

The reason a lot of EV people want to buy the car after lease is that they will know how the car has been treated, and have used some of their payment total to buy some equity in the car. If the lease terms make buying the car less doable than looking for a used Bolt, then the high payments look doubly bad. Ducrider keeps implying that I want GM to write lease terms for me, specifically, but I think that most people reading what I write realize that what I'm asking is that GM write a lease for people, as a category, who want to eventually own their car, and can't qualify for the $7500 purchase credit. That doesn't seem to me like an unreasonable request.

Your situation represents a small percentage of all (potential) Bolt leases. Doing what you are asking will cost thousands of people about $450-$500 dollars each (tax on the CCR).
Factory subsidized leases are designed to appeal to the broadest range of buyers and look attractive in advertisements (with low payments being the primary objective).

You need to look outside of GM Financial to obtain the type of financing you are looking for. You are not their target audience.

Gluten Free Vegans probably don't eat at McDonald's and they don't expect them to change to meet their needs.

 

[LeftieBiker]

You keep stating that many retirees and others who can't use the $7500 Federal credit to purchase are a small percentage of potential Bolt drivers. This seems to me to be true only in the sense that the Bolt lease is structured to drive us away. Do you have any stats? Maybe you could do a survey here. I've been driving a Leaf for almost 4 years, and have owned EVs for 16 years, now. In my experience the lower-income EV driver is more than just a small minority. It's more like, in my experience, a large number of affluent people on top of the distribution, EV enthusiasts with limited means solidly in the middle, and more typical Middle Class people one the bottom, in much smaller numbers, because of a lack of interest and a desire to just drive a normal car that they can buy anywhere. It would be interesting to get some actual stats.

 

[DucRider]

You keep stating that many retirees and others who can't use the $7500 Federal credit to purchase are a small percentage of potential Bolt drivers. This seems to me to be true only in the sense that the Bolt lease is . Do you have any stats? Maybe you could do a survey here. I've been driving a Leaf for almost 4 years, and have owned EVs for 16 years, now. In my experience the lower-income EV driver is more than just a small minority. It's more like, in my experience, a large number of affluent people on top of the distribution, EV enthusiasts with limited means solidly in the middle, and more typical Middle Class people one the bottom, in much smaller numbers, because of a lack of interest and a desire to just drive a normal car that they can buy anywhere. It would be interesting to get some actual stats.

TrueCar.com gathered data from EV buyers to find out who they are, and what motivates them to make the plug-in plunge. The study found that, compared to the buyer of conventional versions of the same vehicle, EV buyers were younger, richer, and generally just hunting for the best deal that they could find.

The study cited buyers of the Ford Focus as a prime example, with the conventional Focus buyer being about 46 years old, with an annual household income of about $77,000. A Focus Electric buyer, however, was on average about 43 years old with a household income of about $199,000. While just half of conventional Focus buyers bought the car because of rebates or price, 82% of Focus Electric buyers bought the EV because they thought it was a good deal.

Buyers of the Fiat 500 and 500e were similarly divided. A regular 500 buyer has a household income of $73,000, while a 500e family brings in on average about $145,000 and an average age two years younger than the regular 500 buyer.

https://cleantechnica.com/2015/05/10/who-are-electric-car-buyers-survey-says/
Google "Average Income of Electric Car Buyer" for others. Not surprisingly, all of them point to EV buyers having higher incomes. Not surprising because of the higher cost of EV's (skewed even more by the relatively high percentage of Tesla's).

Putting together a lease program designed for low income customers a way to purchase an EV presents several difficulties. It requires both a low monthly payment AND a low residual. Another issue is qualifying for a lease (a $40K Bolt with $9K of Adjusted Gross Income for example). Even if the low monthly lease payment is achieved, the retiree would need the means to purchase the vehicle at the end of the lease (the ultimate goal).
Taking the Bolt as an example:
If GM Financial dropped the residual by $5K and added that to the CCR, you looking at a balloon payment of $17,500 (Base LT - no taxes or fees included either in the lease or residual). Real market value is likely to be closer to $13K. So you are asking a retiree to come up with a lump sum payment or locate financing of $17.5K on a vehicle worth $13K (and once again run into the issue of income to loan ratio). Payments are like to $500/mo or higher - on a 3 year old EV! Makes leasing a new EV look much more attractive - lower price, better performance/range, etc.

Bottom line - low lease payments are not a way to make a (relatively) expensive vehicle affordable to purchase for a limited income customer.

The Bolt lease is NOT "structured to drive you away". It is structured to fit the needs of 90%+ of potential customers (I doubt that low income purchasers would represent anywhere near >10% of sales).

You repeatedly ignore the point that other financing is available. What quotes have you gotten from other leasing sources? Are they offering the entire $7,500? What are the monthly payments on a lease with a low residual that offers the entire tax credit as a CCR?

 

[LeftieBiker]

I asked for a quote from one leasing company, giving the specific car and options I wanted, and they gave me one with the wrong options - obviously a generic one. I wasn't impressed with them.

Putting together a lease program designed for low income customers a way to purchase an EV presents several difficulties. It requires both a low monthly payment AND a low residual. Another issue is qualifying for a lease (a $40K Bolt with $9K of Adjusted Gross Income for example). Even if the low monthly lease payment is achieved, the retiree would need the means to purchase the vehicle at the end of the lease (the ultimate goal).

You aren't entirely understanding the issue. The monthly payment on a "lease to own" plan wouldn't have to be "low" - it could be even a little higher than the current GM lease payments. The difference would be the lower residual, which would make it worthwhile to buy the car (by financing it) when the lease ended, if still desired. You are playing with the numbers a bit, in order to make your point seem better: a Bolt base LT with no options is likely to be worth much closer to $17k when the lease ends than to $13k, because unless the cars prove to be Buggy they won't be semi-obsolete after 3 years like a Leaf or FFE. Call it $15k. And financing that 3 year old Bolt isn't likely to cost $500 a month - more like $300 for 48 months, making it a nice drop from the lease payment. Manufacturers will sometimes offer free financing as well, for off-lease purchases, dropping the payment below $300 in that case.

The EV "buyers" info you quote is interesting, but it leaves a few questions. Are they including lessees? because if not, the info is worthless: the way the tax credit is structured is preventing people with good credit and savings but modest income from buying an EV, and thus from being included in the data if they lease. That's the whole problem. looking at the comments on the Techica piece, they note the brevity of it, the complete lack of cites, or a even a link to the supposed survey, etc.

 

[GetOffYourGas]

TrueCar.com gathered data from EV buyers to find out who they are, and what motivates them to make the plug-in plunge. The study found that, compared to the buyer of conventional versions of the same vehicle, EV buyers were younger, richer, and generally just hunting for the best deal that they could find.

The study cited buyers of the Ford Focus as a prime example, with the conventional Focus buyer being about 46 years old, with an annual household income of about $77,000. A Focus Electric buyer, however, was on average about 43 years old with a household income of about $199,000. While just half of conventional Focus buyers bought the car because of rebates or price, 82% of Focus Electric buyers bought the EV because they thought it was a good deal.

Buyers of the Fiat 500 and 500e were similarly divided. A regular 500 buyer has a household income of $73,000, while a 500e family brings in on average about $145,000 and an average age two years younger than the regular 500 buyer.

There is a fundamental flaw in using this as your argument. This study looks at people who are currently buying EVs. Leftie is talking about people who would like to, but cannot or will not for certain reasons.

If GM is smart, they should be aiming the Bolt at the people who aren't currently buying EVs, but would like to. This includes, among others, those who cannot claim the entire tax credit.

A fundamental question - do you believe that GM built the Bolt in order to win a larger share of the <1% of buyers who already buy EVs? Or do you believe that they want to increase that percentage, and reach new buyers?

 

[WetEV]

a larger share of the <1% of buyers who already buy EVs?

EVs meaning plug in cars are more than 1% of the market in the USA. Or do you mean pure EVs?

https://cleantechnica.com/2017/02/04/us-electric-car-sales-59-january-2017/

Fully electric car sales were up 41% YoY.

 

[WetEV]

a larger share of the <1% of buyers who already buy EVs?

EVs meaning plug in cars are 0.98% of the market in the USA. Over 1% isn't far into the future.

https://cleantechnica.com/2017/02/04/us-electric-car-sales-59-january-2017/

Fully electric car sales were up 41% YoY.

 

[GetOffYourGas]

a larger share of the <1% of buyers who already buy EVs?

EVs meaning plug in cars are more than 1% of the market in the USA. Or do you mean pure EVs?

https://cleantechnica.com/2017/02/04/us-electric-car-sales-59-january-2017/

Fully electric car sales were up 41% YoY.

In 2016, autosales were 18.4M - http://www.businessinsider.com/us-auto-sales-december-2016-2017-1
In 2016, all plug-ins sold 159K - http://insideevs.com/wp-content/uploads/2017/01/2016-sales-chart-December-vfinal3.png

So looking at a whole year, plug-ins are at about 0.86% market share combined. Yes, it's rising. In 2017 it may cross 1% for the year, but probably no more than 1.5%. Or that's my prediction, and I'm sticking to it. At least for today.

 

[DucRider]

TrueCar.com gathered data from EV buyers to find out who they are, and what motivates them to make the plug-in plunge. The study found that, compared to the buyer of conventional versions of the same vehicle, EV buyers were younger, richer, and generally just hunting for the best deal that they could find.

The study cited buyers of the Ford Focus as a prime example, with the conventional Focus buyer being about 46 years old, with an annual household income of about $77,000. A Focus Electric buyer, however, was on average about 43 years old with a household income of about $199,000. While just half of conventional Focus buyers bought the car because of rebates or price, 82% of Focus Electric buyers bought the EV because they thought it was a good deal.

Buyers of the Fiat 500 and 500e were similarly divided. A regular 500 buyer has a household income of $73,000, while a 500e family brings in on average about $145,000 and an average age two years younger than the regular 500 buyer.

There is a fundamental flaw in using this as your argument. This study looks at people who are currently buying EVs. Leftie is talking about people who would like to, but cannot or will not for certain reasons.

If GM is smart, they should be aiming the Bolt at the people who aren't currently buying EVs, but would like to. This includes, among others, those who cannot claim the entire tax credit.

A fundamental question - do you believe that GM built the Bolt in order to win a larger share of the <1% of buyers who already buy EVs? Or do you believe that they want to increase that percentage, and reach new buyers?

And just how do you do a survey of people who did not buy the Bolt (or any other EV)?
It does show the demographics of those that do purchase EV's and holds some relevance. Structuring a finance program designed for low income (low tax liability = low AGI 99% of the time) customers to purchase a $40K car is presumptuos. The argument that they could have multiple programs in place is also impractical.
It's hard enough getting car salespeople to talk intelligently about EV's. Asking them to delve into the personal finances of potential buyers in order to decide which GM financing program most meets their needs might be even sillier than it sounds when you say it out loud.

The problem for retired purchasers is that the Federal incentive is a Tax Credit - and you must have enough tax liability in order to take full advantage of it. Language was included that specifically allowed leasing companies to get the credit to help with adoption, but it is not structured as a rebate or discount on the purchase price. Many have argued it would be more effective that way, and most state incentives are indeed structured to be available as POS (Colorado modified theirs to be available that way as of Jan 1)

And the Bolt has indeed shifted the market. The demographics at the Portland Auto Show were very different. Decidedly more female but also a shift towards "just folks". A larger portion were indeed older and modest income, as well as younger with families. I even got the question "Can I fit 3 car seats in the back? (No). Any $40K (or even $30K) car is a stretch for many. The Bolt being "affordable" must be qualified as "for a 200+ mile EV". The 200+ mile figure seems to be a turning point. Most don't need near that much range, but it is much more comfortable number for them than 80 or even 150. It appears to be the "magic number" that will open the market to a much broader range of buyers (that can't or won't spend the money on a Tesla). My rough estimate is that easily 3 or 4 times as many people are truly interested in the Bolt and seriously considering a purchase - so yes they have pushed well past the 1% mark.

But the big caveat is that it is still an "around town" car. Even if CCS was readily available at the 50 or 80kW number, refueling on a long road trip adds too much time. Tesla Supercharging is an acceptable delay (borderline for many), but anything slower is impractical (unless you just need to stop once to get a quick boost).

Within a year or so, this whole tax credit/leasing argument will be a moot point. Either GM will enter the sunset phase or Congress will eliminate the credit during their tax reforms.

 

[LeftieBiker]

And just how do you do a survey of people who did not buy the Bolt (or any other EV)?

You survey people who are in the market to "Buy or lease an EV." You have them specify which, or both, and ask intelligent, relevant questions that include asking about qualifying for the tax credit, and whether they want to purchase their leased car. There, that wasn't so difficult, was it?

 

[DucRider]

And just how do you do a survey of people who did not buy the Bolt (or any other EV)?

You survey people who are in the market to "Buy or lease an EV." You have them specify which, or both, and ask intelligent, relevant questions that include asking about qualifying for the tax credit, and whether they want to purchase their leased car. There, that wasn't so difficult, was it?

The questions are easy. How do you identify and contact the people "in the market"? That's the difficult part.
Many that were in the market will have purchased/leased one - I assume you want to exclude them?

If you can source a good list that will have enough participants "in the market" to be statistically significant, I will see that a survey is put together. It will be administered by a third party and I will arrange for an organization with some vested interest in the results to underwrite it (Auto Dealers Association, Electric Auto Association, Plug-in-America, Sierra Club, etc.)

Feel free to PM me and I will get it started.

 

[LeftieBiker]

How do you identify and contact the people "in the market"? That's the difficult part.

There are two answers to that question. One is "Use these forums." the other is "Survey people who have already bought or leased an EV, and assume that this is where they got the existing figures in the questionable surveys mentioned above." The most important question would be "Did you lease an EV because you couldn't qualify for the Federal EV purchase credit?" I can tell you that, based on my participating in the Leaf forum for years, the percentage of people who lease Leafs out of necessity is substantial.

 

[DucRider]

How do you identify and contact the people "in the market"? That's the difficult part.

There are two answers to that question. One is "Use these forums." the other is "Survey people who have already bought or leased an EV, and assume that this is where they got the existing figures in the questionable surveys mentioned above." The most important question would be "Did you lease an EV because you couldn't qualify for the Federal EV purchase credit?" I can tell you that, based on my participating in the Leaf forum for years, the percentage of people who lease Leafs out of necessity is substantial.

Once again reinforcing that it is how the incentive is structured and that it is beyond the control of manufacturers and finance companies. I'm certain that they, like you, would much prefer to see a program that provided a discount at time of purchase. Much easier to explain to salespeople (and customers) and would likely help increase EV sales.
GM Financial has made the decision to save thousands of people hundreds of dollars instead of hundreds of people thousands of dollars. Sucks for the hundreds, but better for the thousands.

 

[LeftieBiker]

Once again reinforcing that it is how the incentive is structured and that it is beyond the control of manufacturers and finance companies. I'm certain that they, like you, would much prefer to see a program that provided a discount at time of purchase. Much easier to explain to salespeople (and customers) and would likely help increase EV sales.
GM Financial has made the decision to save thousands of people hundreds of dollars instead of hundreds of people thousands of dollars. Sucks for the hundreds, but better for the thousands.

I have also seen quite a few posts by drivers of other EVs - not just the Leaf - about either buying their leased cars, or at least considering it. IIRC, you can't buy your Fit? If that's the case, then you are used to not considering that aspect, because it was never an option. Most leased vehicles do have a purchase option.

BTW, there is a growing backlash to the idea that GM taking $5k of the tax credit, and then inflating the residual to save lessees a few hundred in taxes, actually constitutes "saving" anything other than their bottom line.

 

[DucRider]

I have also seen quite a few posts by drivers of other EVs - not just the Leaf - about either buying their leased cars, or at least considering it. IIRC, you can't buy your Fit? If that's the case, then you are used to not considering that aspect, because it was never an option. Most leased vehicles do have a purchase option.

BTW, there is a growing backlash to the idea that GM taking $5k of the tax credit, and then inflating the residual to save lessees a few hundred in taxes, actually constitutes "saving" anything other than their bottom line.

If you think that artificially inflating a residual adds to a Finance companies bottom line, there is absolutely no point in continuing any discussion.

They wind up owning truckloads of returned EV's with a book value thousands of dollars above real market value. They then wind up wholesaling them at a loss. Look at the Fita 500e - auction values for 3 year old >30K mile lease returns are <12% of MSRP. Putting a high residual to achieve low monthly payments did not "add to the bottom line".

The LEAF purchases at the end of the lease mostly occur as a result of Nissan giving them the car for near the true market value - usually $5-$7K LESS than the residual in the lease contract. That is almost certain to occur with the Bolt as well (unless somehow a Base LT with 36K miles is worth $23K in 3 years). So yes, those that lease the Bolt will "consider" buying at the end of the lease - if the price is right (and it's unlikely to be anywhere near 60% of MSRP).

And the Fit EV is not available for purchase - and I wouldn't if it was at the lease book value (after 3 years it was $23,571.45). Is there I price I would? Yes. What IS the market value of a 3 year old 80ish mile EV with no quick charging? <$10K? <$8K?

 

[LeftieBiker]

If you think that artificially inflating a residual adds to a Finance companies bottom line, there is absolutely no point in continuing any discussion.

No, I'm saying that GM taking $5k in Federal cash up front and then saving lessees a few hundred in taxes does not constitute "helping" the lessees. I agree about residuals not being set in stone, but few will want to lease a Bolt with the plan to buy it when/if GM cuts the residual buyout price in 39 months. Buying a lottery ticket every month would work about as well.

Ok, we've run this topic - which isn't even the subject of the actual topic! - into the ground. Everyone knows what we both think about leasing a Bolt, that's for sure. As for the actual subject of the topic, I'm settling into the position that GM wants to sell X number of Bolts per year, for emissions and tax credit reasons. They want to win awards and beat other sub $50k EVs in drag races. They don't want to transition to EVs or even PHEVs, and are hoping that in 10 years they will still be mainly selling trucks and luxury cars with ICE powertrains.

 

[SparkE]

Ok, we've run this topic - which isn't even the subject of the actual topic! - into the ground.