Microleases Are Finally Getting People To Drive EVs

The ever-evolving electric vehicle landscape and lingering skepticism about going green has forced automakers to get creative with their marketing and sales strategies. Microleasing, according to Bloomberg, is the latest way to get butts in seats. The whole goal is to just get a prospective EV buyer behind the wheel of an EV while they wait a few months for their dream EV to finally hit the market.

Even EVs Can’t Get A Break From The Heat

Bloomberg kicks off with an example from Polestar; while the highly coveted Polestar 3 has yet to actually arrive at dealerships, the automaker has started to offer microleases on its Polestar 2. For a little as five months, you’ll be able to drive an EV, then swap it in as soon as your desired EV arrives.

And microleasing isn’t the only strategy; other EV makers are opting for things like subscriptions to keep cars moving off their lots, at least for a while. EV inventory is piling up at plenty of dealerships in America as the “early adopter” phenomenon dies down, and plenty of prospective buyers are hesitant to commit to one vehicle when such rapid advancements are being made in the EV tech space. Why buy an EV now when next year you can buy an EV with better range and faster charging capabilities? Microleasing gives a prospective buyer the chance to experience EV life without having to commit to a technology that will become rapidly outdated.

Here’s a little more from Bloomberg:

While short-term setups may not be cheaper than car ownership in the long run, they are helping drivers dodge hefty upfront payments while EV prices and interest rates are still relatively high. There are also more EVs to hold out for than ever. Although the US market now boasts 55 distinct electric models, that number is expected to grow another 20% to 30% next year. New cars in the pipeline include the next iteration of the Hyundai Ioniq and the long-awaited Volkswagen ID.Buzz, as well as a parade of three-row SUVs.

Carmakers and dealers, meanwhile, can use microleases to more easily monetize a growing glut of EV inventory. Philipp Sadek, a principal at Boston Consulting Group, predicts subscriptions and short-term leases could soon account for up to 15% of new car transactions around the world, compared with “low single digits” now. “The car buying process today is still very tedious,” Sadek says. “With this, one moves from ownership to usership.”

In the pre-pandemic era, several automakers introduced subscription leases, which were essentially month-to-month leases that allowed subscribers to pop between vehicles every 30 days — and it didn’t really work. Drivers got tired of figuring out new controls in their cars every few months, and automakers were required to keep a ton of idle inventory on hand in the instance that someone might want to drive that specific car.

But the business model might have just needed to be built on EVs for it to make sense. In the ICE-powered car world, you could trust that, say, your Cadillac XT6 would remain pretty much the same for a few years; it made more sense to opt for a longer lease, then trade your car in when a newer, better model came out. In the EV era, though, massive advancements are made on the regular; a month-to-month lease might just be the perfect thing to convince drivers to make the switch.