Monday, September 2, 2013

Automakers Slash Battery Car Prices


2014 Chevrolet Volt
General Motors has just announced a price cut for its 2014 Chevrolet Volt plug-in.  The "extended range electric vehicle" will carry a $34,995 sticker price-- $5,000 less than the 2013 model. 

But GM is not the only automaker slashing prices.  In fact, Nissan led the charge, reducing the base price of the 2013 Nissan Leaf SV from $35,200 to $31,820, and introducing a base model 2013 Nissan Leaf S at $28,800.  Honda has followed suit, cutting the monthly lease price of its new Fit EV from $389 to $259.  Smart has reduced the lease price of its third-generation Electric Drive to just $139.  And, Ford has made cuts to the price of its Focus EV. 
2013 Nissan Leaf
Why the sharp cuts in electric vehicle prices?  First, as production volumes increase, the cost to build a battery-car has begun to drop.  Second, California regulators are requiring automakers to produce a minimum percentage of zero-emission vehicles.  If they fall short, they could be barred from selling vehicles in California.  Moreover, seven states have copied the California guidelines and more are expected to follow suit.  So, losses on electrical vehicles are marginal compared to the possibility of being barred from selling vehicles in as many as eight states. 
Tesla Model S
The price reduction is certainly an incentive to consumers, who will also enjoy a $7,500 federal tax credit for purchasing most electric vehicles, in addition to incentives in the states of California and Colorado. 

Currently, the 2013 Nissan Leaf is the top selling battery vehicle.  And, Tesla holds the market for high-end, sporty electric vehicles, surprising the auto industry with a second quarter profit for 2013.  The base price of the Tesla Model S battery sedan is currently $62,400, but this steep price has obviously not dissuaded many customers.

Will the price cuts get more consumers into battery powered vehicles?  Only time will tell.

    Beth Wells
Helping Consumers Get Rid of Lemons, 9 Years Running
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