Big Battery Bang

Solution for the problem of pre 2013 Gen 1 Leaf (ZE0 and AZE0) built in the early days is a hot topic over the past few years. Some has replaced with used batteries at costs varying from LKR 300,000 to 800,000.

But the sad situation is we are surrounded by rogues and con artists offering various solutions including module, cell replacements, repairs etc.

Added to the woes, there is an undue panic fueled by the ones who fish in the troubled waters. There are two types of people, buying and selling guys who wants spread fear psychosis and the once who wants to make undue profit off illegal imports. There is a solution within ourselves and our context, this is to explore.

There are many discussions initiated on EV Club, Leaf owners groups and other forums too on battery degradation and the ailing resale values. But we are neglecting the fact that these is a massive opportunity that we miss badly.

The need

We are not needing HV batteries as its hyped, the current (late 2019) need is limited to around 100 cars dropped below the range of 50 out of a total number of 5,000 Leaf’s. And they are the people who speak aloud for obvious reasons.

Over 500 more owners joined the bandwagon of battery hunt due to undue panic. Like the ones having 6 bars and a range up to 100 km, which is triple the average daily Sri Lankan usage.

We propose differently, for the 2012/13 cars affected with battery degradation and for the ones who panicked with the range needed for daily errands. Let’s look at some facts and figures, which many misses.

Replacement costs

Dropping resale value is obvious as the even a new EVB attracts a cost atop 1/3 of the overall car value. And we bought 2013 JDM G grade of 4.2M JPY (LKR 5.2M) after a one years depreciation circa LKR 2.8M. That is a 45% depreciation.

Now the battery costs, brand new 24 kWh pack is 650,000 JPY which is 1.1M LKR sans freight and duty. Also it is to be noted this price is a subsidized cost even now, although there are strong speculations on future price drops.

Now don’t be up in arms asking us to get you that battery. For the very reason the battery is subsidized only the authorized imports get qualified to. The local agent AMW is at fault here for not importing Leaf then.

The country gets at least couple of used batteries a month, amidst all legal and logistical barriers. These were priced at LKR 300,000 couple of years ago but now it goes in the range of LKR 800,000.

Resale value.

This is the focus of this post. We bought AZE0 Leaf for less than 3M and now with a range of say 50 KM few are at less than half of original values. Yet none are reported off the road, due to a failed battery. Some are barely managing with 20 Kms range with one bar.

There is a massive error anyways in the way we calculate our resale values as we simply get the difference between buying and selling. God knows where we factor the costs on Capital, Fuel, Maintenance, Statuary which should be part of cost per km and resale values. I have done the math for over 5 years and posted on different posts.

Market size

The country has almost a million cars, at least half of that are over 1.5M LKR in value, that is a big number of 500,000. Last year (2018) country has added 80,000 new cars and another 138,000 used cars changed hands with the country. (Source: Department of Motor Traffic) . Now, within this 138,000 at more than half to be over 1.5M LKR in value (based on above equation and Ikman.lk tops with Toyota) so the prospective market for the ZEO, AZEO Leaf.

With the courtesy of Ikman

The average daily driving distance in USA, UK and Australia lies within 30 Km a day! We assume ours will be the same or lesser being a small country, sorry our govt has no need of this vital data for Sri Lanka.

Now, let’s assume within above 138,000 used cars gets transferred in a year at least half of the owners are below average daily usage of 30 Kms. And half of that are above LKR 1.5 M in value.

This derives a market size of 34,500 recorded used car sales a year. Leaf is well within this segment in both price and size, with an edge of being Japanese and least cost per kilometer!

LEAF should grasp this massive market, instead for batteries for less!

Simply said, switch to an EV with a suitable range. You may sell yours from LKR 1.2M upwards (updated Mid 2020) and add the battery cost of LKR 800,000 to fund a Leaf with a 100+ KM range with above 8 bars. We have discussed the financials in a different post.

Why not switch?

True the range drops over time, and if the range is not adequate for daily / weekly needs why not we sell the car, put some money down and buy a LEAF with a higher range instead?

And don’t forget hiring a car or Van is a cheaper option once you do the math with ownership cost per km / per head.

We know its hard or virtually impossible to switch from EV to ICE, but not to worry, we have enough options, whilst it’s getting better and wider with both range and availability.

The Three Key Things

One: This is not to say that there is no solution for replacement batteries but for now. Some talks of developing the batteries locally, but the technical and market barriers will not make such efforts sustainable. So far the best solution is used batteries.

Two: Don’t forget to follow the best practices in usage and charging until then, the very reason for some to exceed 100,000 kms with 100k per charge still remains and a one exceeded 200,000 kms, and keep running with enough range remains!

Three: Don’t think Leaf will suit for each and every family and the needs. There are greater limitations especially with the range and recharging in the middle. Choose your ride wisely, Leaf’s are much greater cars but owning an EV needs analysis and planning your trips. If you cannot or aren’t, don’t buy Leaf.

Okay, all these are options for the concerned. But what if one really needs a replacement battery, say in a case of the usage is limited to 20 Kms?

For now the best solution will be replacing with a used battery. There are statuary and legal barrier for now. In fact it seems barriers have created a black market, as a repercussion of the import restrictions.

Here we have a Q&A session (in Sinhala), answering most of your common questions. https://mobility.lk/why-buy-ev-qa/

Here is our proposal to legalize and facilitate the EVB imports with no/minimum impact to the society or the environment. : EVB IMPORTATION