Nissan offers low-cost Ariya EV lease to dealer employees

Nissan is looking within to spark some market enthusiasm for a key electric model.

In early September, Nissan offered dealership employees a low-cost, short-term lease on the Ariya electric crossover, which launched late last year.

The 1-year, 15,000-mile lease has a 2.2 percent APR and offers $1,000 in loyalty cash. Dealers said the average monthly payment is about $250 to $270 with zero down payment.

The initiative, extended another month, is billed as an enthusiasm builder for those tasked with selling and servicing the Ariya. The lease program provides Nissan sales and service employees a low-cost opportunity to get the EV ownership experience.

"Nissan wants the front lines to taste and feel the product," said Eric Frehsee, president of Tamaroff Auto Group in Southfield, Mich. "There is no better way to build some excitement than getting your employees behind the wheel."

Judy Wheeler, Nissan Division's U.S. sales boss, said the lease offer seeks to grow Nissan's "tribe of ambassadors first."

"It's important for our [retail] employees to really understand the vehicle so they can actually explain all the technology to the customer," Wheeler told Automotive News. "They are our best advocate."

Justin Crain, managing partner at Burleson Nissan near Fort Worth, Texas, referred to the dealership employee lease as a "genius move."

Crain said most dealership employees don't have an electric car. "Nobody understands the technology; nobody knows how to explain it to customers," he said. "I think this is a win-win for us and Nissan."

The program also intends to put more Ariyas on the road to drive buzz around the new model.

"When you launch an all-new vehicle, it takes time to get awareness in the marketplace," Wheeler said. "One of the things we felt was very important [was] to get more of our vehicles on the street for consumers to see them."

Some Nissan dealers, who find it challenging to sell pricey EVs in a high-interest-rate market, also view the employee lease program as a way to shrink their slow-moving Ariya stock.

According to Edmunds, 12-month leases accounted for 45 percent of total Ariya leases in September.

Nissan launched the Ariya last fall. It was expected to be a shot at redemption after the EV pioneer lost its early lead in the segment to Tesla and others. However, a roughly yearlong delay in launching the crossover in the U.S. and changes in the federal EV tax incentive program hamstrung the Ariya's market prospects.

Nissan sold fewer than 10,000 electric crossovers in the year's first nine months. According to Edmunds data, the Ariya's inventory turnover rate was 76 days in September, compared with 59 days for the Hyundai Ioniq 5 and 39 days for the Mustang Mach-E.

"Consumers are not buying this car at all," said Chadi Moussa, CEO of Carnamic, which operates two Nissan stores in the San Francisco Bay Area. "It's costing me about $400 a month in interest only sitting on the lot."

Edmunds' director of insights, Ivan Drury, said the Ariya suffers from a lack of awareness.

"Ariya shoppers consistently shop the model against competitors at a higher rate than competitors to Ariya," Drury said. "It is lopsided."

Edmunds data showed 22 percent of consumers considering the Ariya cross-shop the Ioniq 5, but only 6.5 percent of Ioniq shoppers consider the Nissan model.

The imported Ariya has a price disadvantage to some North American-made competitors that qualify for the $7,500 federal tax credit under the Inflation Reduction Act.

"Demand is soft because of high interest rates and the lack of incentives," Moussa said. "I'm accepting fewer Ariyas."

But Nissan's Wheeler argues that the Ariya's momentum is building as the automaker dials up the supply of the U.S. market-geared e-4ORCE variant.

"A lot of customers in this space want it all," she said. "They want the all-wheel drive, they want the technology, they want the higher-end vehicles. And we now have those on the ground."

Ariya sales in the third quarter nearly doubled to 4,504 units from the second quarter.

"We are finally finding our stride with that vehicle," Wheeler said. "We're selling closer to what we originally had expected to do each month."

Nissan is also working to improve the EV's affordability. Passing along the $7,500 U.S. commercial clean vehicle tax credit through consumer leases helps make the Ariya more competitive.

But retailers say Nissan must eventually take the shears to the sticker price to make it more competitive.

A price cut on the Ariya "is not a question of if, just a question of when," said a retailer who requested not to be identified.

"Nissan has no choice but to get this price right so that it sells at a big enough volume," they said.

But if Nissan is planning such a move, Wheeler isn't telling.

"Everything will be considered in the future," she said. "We're just not ready to disclose what our plan is."