This is a very smart move.
Volkswagen has emerged like an electric phoenix from the diesel-scented ashes of its past to become one of the market leaders in electric vehicles. It's newly launched ID.4 SUV is proving to be quite popular across the globe, and the brand is aiming to be 50 percent electrified by 2050. VW's ingenious subscription-based sales model and its cheap and cheerful ID.1 will also open the doors to those who would have previously been excluded from the EV market due to prohibitive costs. The German manufacturer now plans to re-lease its used EVs in order to hold on to the valuable batteries they carry, allowing VW to recycle them into new uses, including power centers, fast chargers, and private dwellings.
Speaking with journalists at the recently-held Munich Auto Show, Volkswagen Group CEO Herbert Diess highlighted the fact that batteries can last a long time, and even outlast the life of the car its fitted in: "In Europe, we are trying to get a second lease and even a third lease, and keep the cars in our hands. Battery life, we think today is about 1,000 charging cycles and around 215,000 miles, something like that. So, the battery would probably live longer than the car, and we want to get hold of the battery. We don't want to give the battery away."
The fact that these batteries last such a long time, even when the rest of the car starts to give up, means that residual values will remain high, making secondary leases budget-friendly.
"There already is an indication that residuals for electric cars might be higher than for internal combustion cars because, even if the car is totally worthless, there still is a battery that may have 70 or 80 percent of its original energy storage capacity," Diess said. Preset residual values will mean that VW customers will be able to use their cars for up to eight years at which point the batteries will be stripped out, and the rest of the car will be broken down into raw, recyclable materials. This is exciting news, especially as the US gets ready to welcome new VW EV models such as the ID Aero and ID Buzz microbus.