Fiat 500e leases for less than a smartphone

If the economics of electric vehicles seem less than sound, consider this: In Southern California, it can be cheaper to lease a Fiat 500e for three years than to lease a working smartphone.

The Fiat 500e -- the car Fiat Chrysler CEO Sergio Marchionne once told consumers not to buy because he lost $14,000 on each sale -- was being advertised widely in Southern California last month for as little as $69 per month for a 36-month lease, with no money down.

Seem cheap? That monthly payment was $20 higher than it was around Black Friday in November.

The 500e, which was introduced for the 2013 model year, is a "compliance car" -- a vehicle whose sole purpose is to satisfy clean-air regulations in California and other states mandating the sale of zero-emission vehicles. And while Marchionne took heat in 2014 for trying to steer consumers away because of the losses the 500e generates, the automaker needs those sales to be able to keep selling Jeeps, Rams, Dodges and Chryslers in the largest state market.

Here's how the Southern California lease deal worked, according to dealership websites in the region: 

The 500e was advertised for $33,295. To make the deal work, the leasing company took ownership of the federal, state and local ZEV tax credits and rebates due to the lessee, along with factory rebates and another $1,000 incentive if the incoming trade-in was a lease conquest. Lessees were limited to putting 10,000 miles a year on the cars. The deals didn't work everywhere or for everybody because some localities have air quality rebates that others don't, and some rebates are limited based on income. 

Add it all up, though, and it's still a lot of money. According to J.D. Power PIN data, the average transaction price for the Fiat 500e was $11,129 in February, while the average incentive dollars-per-unit spend was $14,463. That gave the 500e an average incentive spend of 130 percent of its average transaction price last month. 

An FCA spokesman declined to comment on the 500e's collective incentives. However, an FCA source said the automaker had no role in the lease deals being offered through the company's preferred lending partner, Chrysler Capital. 

The Fiat 500e has changed little since it was introduced in the summer of 2013, even as other automakers have upped the capabilities of their electric offerings. For example, the 500e's 84-mile EPA estimated range on a full charge is now dwarfed by competitors such as the Chevy Bolt, with a 238-mile estimated range. 

According to dealer websites advertising the cheap leases, the 500e would have a residual of $19,977 at the end of the lease term. Those estimates might be generous. According to GreenCarReports.com, off-lease 2013 Fiat 500es were being listed on Manheim auction sites in Southern California late last year for as little as $4,100.