GM to Lease Electric Car Starting this Fall

08/29/96

Both the Associated Press and Reuters have reported GM's plans to lease its new electric car, the EV1. The company has decided to pursue a cautious approach to the vehicle's public introduction. Although GM will ship the car to Saturn dealers in Southern California this fall, it will not be available for purchase, initially.

Rather, the two-seat EV1 coupe will be available only through a three-year lease. The same terms will apply to the garage terminals needed to recharge it. GM officials said they expect the lease price to be about the same as it would be for a $35,000 car.

The company hopes its lease-only policy will help it establish a mass market for electric cars in urban areas. GM says leasing will free buyers from worries about the car's resale value in a market that does not exist yet, or about getting stuck with a car that is made obsolete by improving technology.

The EV1 is the first modern production car designed to be an electric vehicle from the ground up. GM will introduce the car in Los Angeles, San Diego, Phoenix and Tucson. One of the reasons GM gave for limiting the introduction of the car to these areas was that colder climates and bigger hills would shorten the vehicles' already limited range of 70 to 90 miles maximum, under ideal conditions.

The EV1 uses Modified versions of traditional lead-acid car batteries power it. Honda and Toyota have opted to use more expensive and powerful nickel-metal hydride batteries in electric cars they are developing. The Japanese automakers say they will start selling electric cars in California next year.

So far primarily governments, utilities and other businesses that have fleets have signed on to buy electric vehicles, but GM expects other customers. The company's projection of the typical EV1 buyer is a 35 to 54 years old, college graduate with a family income of $125,000 and higher, multiple cars, and an interest in new technology and the environment.

Saturn spokesman Bob Tripolsky said monthly lease payments will range between $400 and $600 depending on the availability of federal, state and local tax credits in different areas. The lease price of the garage terminals has not yet been determined and is not included in those figures, although one estimate said it would add an additional $50 to the lease price.

GM executives won't discuss production or sales targets for the vehicle, but hope the car's novelty pushes initial demand beyond supply. The company has reported that about 1,000 people have called a toll-free telephone number, and dealers have taken names of 300 serious customers--including Tonight Show host Jay Leno.

The EV1 offers snappy acceleration and sports-car like handling: Sean McNamara, marketing manager for GM's Advanced Technology Vehicles group, said, "We can keep up with a Nissan 300ZX from zero to 30." Sports-car driving, however, will quickly drain the battery, and require a three- to four-hour recharge.

The car's aerodynamic tear-drop shape (narrow in the rear) looks unlike anything else on the road. Referring to the fresh look, Robert Purcell, general manager of GM Advanced Technology Vehicles, said, "This is the car that gets the market started. We wanted to put out a car that was very exciting so that people would fall in love with it."

Paul Dever -- The Auto Channel