Want to try an EV out before committing? EV micro leases are gaining popularity

If you want to try an EV out before getting locked into a long-term contract, there’s an option for you. EV micro leases are taking off, giving shoppers added flexibility with new models launching next year.

Are you waiting for that new electric SUV coming out next year? Or, perhaps you don’t want to commit to a long-term contract.

Either way, EV micro leases may be an option for you. In October, Polestar launched its Flexible Lease program. The new option eliminates the worst part of leasing a vehicle – being locked in.

Polestar is making it easier than ever for you to try out an EV before committing to a long-term contract. The Flexible Lease program allows you to end the lease after five months (and five payments) with no early termination penalty (there is a $450 disposition fee).

Through the program, the 2024 Polestar 2 Long Range Single Motor variant is available to lease for $349 per month for up to 24 months. That’s with $5,349 due at signing.

The Polestar 2 Long Range features up to 320 miles of range and 205 kW DC fast charging. Gregor Hembrough, head of Polestar North America, explained that the new program allows “customers to lease a Polestar vehicle with the flexibility not normally permitted by a traditional lease.”

This makes it a “great option for customers new to EVs or those looking to bridge the gap as they await a Polestar 2, Polestar 3, or Polestar 4 on order.”

Polestar adds flexibility with EV micro leases

“Let’s put it this way: It’s an extended test drive,” Hembrough explained. With several highly anticipated electric models like the Polestar 3, Chevy Equinox, next-gen Hyundai IONIQ 5, and more coming next year, Hembrough said Polestar had to “step up to the plate.”

With many customer leases expiring, Polestar’s EV micro lease offers that “bridge” for those waiting for new models.

Although the short-term car lease is not a new concept, it’s being re-introduced as the auto industry shifts to electric.

Polestar isn’t alone, either. AutoNation, which runs around 250 US dealerships, also recently began offering micro leases in 6- or 12-month options. Ivan Mihov, vice president of mobility, said, “The three-year lease doesn’t work for everybody.”

“With EVs in particular, obviously, there are a lot of people on the fence,” Mihov added. The short-term lease option allows buyers to try it before getting into a long-term commitment.

Since launching its flexible lease program, around half of Polestar buyers have enrolled. Hembrough admits that “100% of my customers are conquests,” meaning the EV maker needs to get creative to win customers.

Polestar says it will extend the program to its upcoming Polestar 3 and 4 models. Andy Axelrod, who manages retail programs and subscriptions at Volvo Car USA, expects participation to increase with the EX30 and EX90 rolling out next year.

The Polestar 3 will enter production in early 2024, with deliveries expected to begin in Q2. It will feature up to 300 miles of range with a starting price of around $85,000.

Electrek’s Take

Polestar was smart to introduce a short-term lease option. For one, it’s a new brand in the US with a product that’s still new to many shoppers.

By offering micro leases, Polestar is getting buyers into its vehicles. If you’ve ever driven an EV, you know that’s all it takes to never go back to a gas-powered vehicle again. Polestar understands this, too, and believes its EVs will help in the industry’s transition.

A big reason Polestar is able to do this is through a loophole in the IRA’s EV tax credit that enables automakers to pass on the $7,500 through leasing.

Although short-term leases didn’t work for automakers like Audi, BMW, Cadillac, and Ford, it’s a new era, and buyers are looking to test the latest technology. It can be an expensive program to run, but to get buyers into a new vehicle, it may just be worth it.

Source: Bloomberg