You Really Ought to Lease Your EV

Four years ago I drove my beloved brown dog home from the high desert beagle rescue in our little red EV. She sat silently in my wife’s lap, wondering what this new life might entail, and spent the ensuing months shedding stabby hairs on the seat cover and slobbering on the back windows as we drove back and forth to the mountains above Los Angeles to hike our way through the darkest days of COVID. Now, she has lost exclusive access to the back seat. Two weeks ago, white-knuckled and nervous, I drove my newborn daughter home from the hospital.

These are the moments that transfigure a hunk of metal into the family car, a thing made of remembrance as much as nuts and bolts. It is a process possible only when you own a vehicle long enough for the good stuff of life to seep into the carpets and scratch up the upholstery. In this way, it matters to me that my Model 3 is our car.

However, after four-plus years of electric vehicle ownership, I am here to tell you: If you’re thinking of getting a new EV this holiday season, then you should probably lease, not buy.

I don’t say this lightly. The idea of leasing sits uneasy with me now that we live in a subscription society where everything is rented and nothing is ours. Leasing, though, could be an ideal solution for those who want to try out the electric life but have reservations about going all-in. And at this moment in the EV age, it’s hard to argue with leasing logic.

For one thing, in terms of resale value, owning a used EV isn’t what it used to be. In 2021, during the chaos of peak pandemic, used car prices spiked to unprecedented levels. As those prices have begun to come down to Earth, EVs are reportedly depreciating at levels faster than gasoline cars, losing as much as half their value in three years, in part because of the price-cutting wars that slashed the cost of a new electric over the past year. As the cost of a new EV continues to fall, the value of owning an older one will wane.

Leasing, at least right now, is also a simpler and better way to shop for an EV. As Heatmap’s Emily Pontecorvo reported last week, the tax credits for buying electric are becoming an even more confusing mess in 2024 because Inflation Reduction Act rules mandate domestic manufacturing for pretty much all components of a qualifying car. But a buyer can skirt much of the red tape by leasing rather than buying. Quality but foreign-built EVs like the Hyundai Ioniqs, which don’t qualify for tax credits if you buy them, can qualify if you lease them, too.

Plus, after three years of driving an EV, you might be eager to start over. I bought a Tesla in 2019 when the most affordable Standard Range Plus version of the Model 3 came with an Environmental Protection Agency-estimated 240 miles of range. If I’d leased it, I could have returned the car by now and gotten into a new Model 3 or Y with at least 260 miles of range, a nice little quality-of-life bump. (Honestly, what’s more likely is that after years of living with the limitations of a shorter-range EV, I would have ponied up for a longer-range model on the second go-round.) Instead, I’m stuck with my slowly decaying battery for as long as I decide to hold onto this car.

The other perk of leasing is the freedom from long-term maintenance and other ownership issues. The EV revolution is still young enough that we don’t know how today’s EVs will age, or what particular problems Model 3s or Chevy Bolts or Ford F-150 Lightnings might encounter when they reach 10 or 12 or 15 years old. EV owners will face thorny questions about whether to replace a battery that’s lost much of its capacity, live with the depleted range, or get out from under the car. EV lessees won’t.

The most compelling reason not to buy an EV today, though, is that you don’t know what’s coming around the corner tomorrow. We’re on the cusp of seeing the carmakers produce fully electric versions of all sorts of iconic and beloved vehicles, from the Jeep Wrangler to the Chevy Corvette. Battery improvements will mean more cars on the market with longer ranges, making longer-distance travel less burdensome.

Think of an EV like a smartphone. Gas-powered cars are like the iPhones and Androids of today — a mature, honestly kind of boring technology that doesn’t change much from year to year. Electric cars are more like what smartphones were 10 years ago, when each passing year brought what felt like a major leap forward and your two- or three-year-old phone felt woefully out of date.

Years from now, when you know exactly what you’re getting into, you might feel more comfortable buying an EV to serve as the dutiful family car for a decade to come — the car that takes your son to second grade and the car he learns to drive in. But if you don’t want to be tied down by what’s on offer today, maybe you should just lease it until tomorrow rolls around.