The Ford Motor Company has three electric vehicle models available with more on the way. The F-150 Lighting, Mustang Mach-E, and the e-Transit are the models currently on sale. For customers who lease these vehicles, a new provision in the lease agreement removes the purchase option that is typically included. This means when the lease is over, customers can either sign a new lease or drop off the vehicle and move on.
Change in Lease Language
Why the change and when did it happen? Effective with leases signed as of June 15, 2022, Ford no longer allows customers to purchase their vehicles. The company explained its position to Car and Driver, noting that the automaker wants to keep these models in the Ford network to “better manage battery recycling and materials.”
Also, by leasing again, customers are assured that they have the latest battery technology and the newest model. We do this with our smartphones, likewise, automobiles may soon face the same trade-in considerations.
Today’s Challenges
Car manufacturers are wrestling with several challenges at the moment as they pivot to electrification. First, the rising cost of rare earth and related materials is putting a dent in profits or otherwise forcing them to raise prices. This places tremendous strain on manufacturers as they seek to keep prices reasonable as inflationary pressures weigh in.
Second, the ongoing chip shortage is limiting inventories across the spectrum. Not just EVs, but every type of passenger vehicle manufactured today require semiconductor chips. Ford and others must find a balance of where to allocate chips to keep their plants humming.
Third, batteries degrade over time. By closely monitoring its leased fleet, Ford can monitor battery life and handle recycling. All manufacturers must offer a battery warranty of at least eight years and 100,000 miles, whichever comes first. Even so, Consumer Reports notes that batteries will degrade about 2.3 percent each year, although that figure depends on the owner’s driving habits, mileage, and where the vehicle is operated (climate).
Wear and Tear Factors
Consumers shopping for an EV should keep in mind several peculiarities related to vehicle ownership. For instance, charging their vehicles to 100-percent battery capacity can degrade a battery faster. Ideally, EV batteries maintain at least 20 percent charge to a maximum of 80 percent. DC fast charging is especially “hard” on batteries too.
Also, when operated in extreme conditions – very hot or bitter cold, the batteries are not as efficient. Like humans, cars “like” optimum weather conditions, such as 72 degrees Fahrenheit. Notably, when the conditions are hot, an EV must produce air conditioning by drawing on the battery system. This means the electric range will drop considerably to cool the cabin.
Lease Considerations
Ford’s lease change does not include EV models leased before June 15. Also, the new lease agreement is only in effect in 38 states. It will take the remainder of the year before consumers in the last 12 states are affected. Figure that consumer laws are the holdup, at least for now.
Finally, consumers should know that the EV they want at the lease end may not be available when turning in their leased vehicle. With shortages likely to persist, inventories may show residual reductions even three years from now or whenever the lease is up. One option is to extend your lease term by several months. Contact your leasing company before your lease ends to explore your options.
References
Fitzgerald, J. (2022, June 24). Ford Won’t Let You Buy Your Leased EV When the Contract Ends. Car and Driver.
Plungis, J. (2020, February 20). Your EV Questions, Answered. Consumer Reports.
Hardesty, Chris (2022, February 4). End of Lease: What to Do During the Chip Shortage. Kelley Blue Book.
See Also — 10 Reasons for Purchasing the Ford F-150 Lightning
Photo Attribution
Image by Jens P. Raak from Pixabay.
Ford F-150 Lightning Pro image courtesy of the Ford Motor Company.
