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Home»Electric Vehicles»Majority of BMW, Audi, and Mercedes Electric Vehicles Are Leased
Electric Vehicles

Majority of BMW, Audi, and Mercedes Electric Vehicles Are Leased

William D. KouchBy William D. KouchJuly 18, 2024Updated:April 21, 202514 Comments3 Mins Read
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Majority Of Bmw, Audi, And Mercedes Electric Vehicles Are Leased
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Why Leasing is Winning Over Buying for German Luxury EVs

The market for German luxury electric vehicles (EVs) has seen a significant shift, with nearly 90% of customers opting to lease rather than buy their Mercedes, BMW, or Audi EVs, according to J.D. Power data reported by Automotive News. This increasingly popular trend is largely influenced by changes initiated by the federal government.

Impact of the Inflation Reduction Act on EV Sales

The 2022 Inflation Reduction Act, America’s paramount climate legislation to date, has reshaped the landscape for the $7,500 federal clean vehicle tax credit. Previously, the tax credit was only limited by a cap of 200,000 credits per manufacturer. The revised version, however, imposes stricter criteria aimed at propelling domestic production and battery sourcing.

The EV Leasing Boom

Since the new tax credit rules became effective, buyers are more inclined to lease their vehicles. Given the high interest rates, depreciating EV values, and rapid advancements in EV technology, leasing presents several advantages. Under the stringent federal guidelines, only North American-built EVs with predominantly American battery components qualify for the full $7,500 credit. EVs built outside North America don’t qualify for any tax credits, and those with foreign battery components qualify for a reduced credit of $3,750. But, EV leases are exempt from these stringent rules, making all vehicles eligible for the federal tax credit.

Mercedes, BMW, and Audi have responded with aggressive lease deals to attract consumers. For instance, BMW has offered attractive leasing terms on its flagship EV SUV, the iX, which has garnered favorable reviews, including from automotive expert Tim Stevens.

Why Leasing Makes Sense

The data shows that a staggering 94% of Audi EVs are leased, as none of Audi’s EV models qualify for the tax credit due to their non-U.S. manufacturing locations. Mercedes has some qualifying models like the EQE and EQS SUVs, but their selling prices often exceed the $80,000 cap set for purchase incentives, making leasing a more viable option. Similarly, BMW leases out 89% of its EVs, the lowest among the three yet still a significant portion.

Historical Trend Toward Leasing

Leasing has always been a preferred option among luxury car buyers, including those of brands like BMW, Mercedes, and Audi, who often seek the latest tech and frequent model upgrades. Additionally, the high cost of maintaining these luxury vehicles out of warranty further tips the scale in favor of leasing. This preference also extends to other premium brands like Lexus, highlighting a broader industry trend. The federal government’s new policies have only accelerated this existing inclination, making leasing both a financially sound and environmentally friendly choice.

Conclusion

While the trend towards leasing luxury EVs might not be ideal for promoting long-term ownership, it undeniably aids in increasing EV adoption. Leasing allows luxury car enthusiasts to frequently upgrade their vehicles, staying abreast of the latest technology while benefiting from substantial tax credits. This practice may seem less beneficial for reducing consumerism or waste, but it’s a step forward in greener driving.

For all the latest updates and insights in the automotive world, follow us on X @automotivefyi or visit our website, Automotive.fyi.


William Kouch, Editor of Automotive.fyi

Audi BMW Electric Leased Majority Mercedes Vehicles
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William D. Kouch

William Kouch, EV Senior Editor at automotive.fyi, graduated with a degree in Communications from Illinois Wesleyan University. With an extensive background in electric vehicles and a focus on Tesla and other leading brands, he brings deep industry insights and a passion for sustainable transportation. Follow William for expert analysis and updates on the future of electric mobility.

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View 14 Comments

14 Comments

  1. Ajohnson
    Ajohnson on July 19, 2024 5:23 am

    Leasing is so smart!! Who wants to buy when u can just keep getting a new car every few years? Way to go Mercedes and BMW!!!

  2. Noah10
    Noah10 on July 19, 2024 5:23 am

    This is stupid. Why would anyone want to keep paying for a car they will never own? Just buy it and be done with it. These leasing deals are a scam!

  3. Caroline32
    Caroline32 on July 19, 2024 5:23 am

    I heard leasing is bettr for taxes. Maybe thats why so many people r doing it?

    • Gavin Fox
      Gavin Fox on July 19, 2024 5:23 am

      Yeah, I think so too. They get the tax credit without the ownership hassle.

  4. Louis Martin
    Louis Martin on July 19, 2024 5:23 am

    Oh great, Another way for rich people to show off their new shiny toys every year. How environment friendly…not!

    • Patrick Lee
      Patrick Lee on July 19, 2024 5:23 am

      Totally! They just keep throwing money at new cars while the rest of us struggle to buy one.

  5. Sophia Taylor
    Sophia Taylor on July 19, 2024 5:23 am

    Leasing is like renting, but with cars! LOL! Guess if you want to feel fancy without the commitment, go for it!

  6. Claire Ross
    Claire Ross on July 20, 2024 5:40 am

    Wow, this is really cool! leasing sound like a great idea for fancy cars. Guess people dont want to spend big money buying no more

  7. Lizzie30
    Lizzie30 on July 20, 2024 5:40 am

    This is so dum, why would anyone lease wen you can own! Waste of money if u ask me

  8. Hgraham
    Hgraham on July 20, 2024 5:40 am

    More people lease cuz it makes sense, the new law makes it easier 2 get the credit. And tech changes fast so why buy.

  9. Lizzie Smith
    Lizzie Smith on July 20, 2024 5:40 am

    Oh great, just what we need, more rules and taxes. Thanks goverment, always making things complicated! 😒

  10. Lisa Simpson
    Lisa Simpson on July 20, 2024 5:40 am

    LOL, so basicaly, you get to drive a shiny new car every few years and save $$? Sign me up! What a joke 😂

    • Bruce Ellis
      Bruce Ellis on July 20, 2024 5:40 am

      Yeah, right? It’s like tech gadgets, you never own them for long!

    • Sonia Clarke
      Sonia Clarke on July 20, 2024 5:40 am

      haha so true! that’s why leasing is smart these days.

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