Octillion debuts new EV battery leasing plan

Octillion Power Systems has announced a new demo program that allows fleet customers to lease batteries when they purchase vehicles.

Under the program, participating fleet operators will be allowed to source batteries through a five-year lease-to-own program, with no up-front payment. 

“The program is designed to ensure that fleets feel prepared to make the switch to EVs,” said Octillion President Paul Beach. “This innovative leasing plan makes it easier for fleets to go green and save money right away.”

The goal of the demonstrator program is to collect data on battery degradation, evaluate fleet operation use models, and assess the second-life viability of used batteries. Octillion plans to build market cases for traditional financing groups that are eager to get into battery leasing but concerned about the technology. Leasing allows fleet operators to immediately tap into the total cost of ownership benefits associated with operating EVs rather than ICE vehicles.

Octillion cited a 2019 survey that asked customers in the market for a new vehicle why they would be hesitant to purchase an EV. The top responses included range anxiety, price point, lack of charging infrastructure and questions surrounding recycling and disposal. These four supposed drawbacks of EVs have inspired Octillion to roll out its battery leasing program for the convenience of fleet operators.

“Leasing batteries to fleet operators addresses many of the underlying issues associated with the adoption of EVs,” Beach said. “With leasing, the upfront cost of the battery is significantly reduced, making the vehicle, in most cases, less expensive than ICE vehicles.”

Building the cost of the lease into the operating budget helps to defer expenses, and allows for lower overall operating costs of the fleet. Fleets are ideally suited for electrification because they can accommodate a “right-sized” battery that optimizes range with cost and weight to address range anxiety issues. Typical regional and local routes require 100-150 miles of range, which allows for efficiently priced and sized batteries customized to meet these routes. Round-trip routes can use localized charging at a centralized depot, allowing charging infrastructure to be shared. Once the demonstrator program transitions to a normalized leasing program of six to seven years, the fleet operator will be able to swap out the used battery for a new one, and the lessor will then repurpose the battery for a second life in a grid storage application.

“With a standard EV purchase at full price, it can take months or even years to see a return on investment, depending on how frequently the vehicle is used,” Beach said. “But with our leasing service, this wait time drops to zero. The lease will be almost identical to a power purchase agreement, which is currently used to lease solar energy sources to households and buildings.”

Source: Octillion Power Systems