Ford, Nissan, Honda, and Fiat have cut prices on their pure electric cars, and Chevy has shaved the sticker on its Volt plug-in hybrid. Now the auto industry will hold its collective breath and see what happens.
"The automakers are certainly keeping a close eye on this," Dave Hurst, senior analyst for Navigant Research, told us.
Last week, Ford slashed the price for its Focus EV by $4,000 to $35,995. This followed similar moves involving the Nissan Leaf ($6,400 price cut), Honda Fit (new lease rate of $259 a month), and Chevy Volt ($5,000 in incentives). Fiat is offering a rebate of up to $2,000 rebate for its 500e, along with 12 days of free annual access to a gasoline rental car.
The question is when EVs will begin to look like a good buy. To some degree, that's already starting to happen. In the first six months of 2013, Nissan Leaf Sales more than tripled from the first half of last year to 9,839. Chevy Volt sales rose 11.8 percent to 9,855.
Ford hopes to do the same for the Focus EV. Reuters reported that the company has built 2,517 Focus EVs and sold 1,593, including about 900 in the first half of 2013.
"Ford is finally recognizing that $40,000 for a Focus is a hefty price, even if it doesn't use any gasoline," Hurst told us.
Still, when government incentives are figured in, the costs are becoming tougher to pass up. A Wall Street Journal article in May discussed a suburban Atlanta man whose cost for a Nissan Leaf could be construed as less than $0. After signing up for a 24-month discounted lease, he got a $7,500 federal incentive and a $5,000 Georgia state subsidy -- to go with about $2,400 a year in gasoline savings. "Suddenly, the car puts $2,000 in my pocket," he told the WSJ.
It's not clear how long such incentives will remain in place or whether auto companies can afford more cuts. At this spring's Society of Automotive Engineers World Congress, Chrysler Group CEO Sergio Marchionne said his company loses about $10,000 on every Fiat 500e it sells.
Experts say the incentives will help sell the cars for now. "The price cuts won't be enough to create a huge boost in sales," Hurst said. "But we're definitely going to see a bump up."
What would it take to put you in an electric car? If the prices were comparable with those for gasoline-based vehicles, would you make the jump? Tell us in the comment section below.
Warren, isn't it hard to live in such fear? You should look into that. Have you ever heard of AAA?
Ford is a perfect example of big auto not wanting to build, sell EV's by overweight, overpriced and overteched ones so they are unaffordable.
What we need are lightweight, medium tech aerodynamic EV's like the GM UltraLite and smaller.
But now they have dropped the prices as more reasonable and they now have long waiting lists and car makers like Honda saying they won't increase production to meet demand
As they should since the batteries cost far less than they are telling us. Tesla said their costs are much lower than claimed by big auto. Tesla's cells are under $200/kwhr and droping and packs are under $300/kwhr.
We buy quality large cells now retail for $400/kwhr so I think big auto pays quite a lot less than that.
I am working through my fear. I am almost ready to give up my dial telephone. But it will be very difficult. However, I have given up my Marconi spark transmitter! And those new superheterodyne radios are something else! The things they can do with valves!
Chuck, I think with the right technology that EVs might be viable in the future. For now, the industry lives on incentives. This is not sustainable (pun intended). If you look at other green industries that have relied heavily on incentives even though they do not actually meet the requirement, you will see that. The best examples are wind and solar energy (I mean PV). These do mitigate some use of fosil fuels, but they have not resulted in the closing of traditional power sources. This is becuase the requirement for power generation is that it be always available. Wind and PV are not. Without some way to efficiently store power and distribute it, these will remain creatures of the subsidy. In Europe, especially countires in the south (e.g., Spain) where the economic situation has necessitated the removal of subsidies, the industry is in bad shape. This is just like the situation with EVs. The technology is not quite there to do what most people need from their vehicles. Again, subsidies have made up for the lack of appropriate technology.
As for the production numbers you cite, I find it interesting. This works out to 0.15% of cars sold (I am assuming 14M in the US). The numbers are almost the level of MG B production averaged over the time those cars were produced.
Price is one issue but the range of the vehicle is an even more important issue. Otherwise, they are crippled for most people as a possibility. That said, a 10% or more price incentive and along with the tax incentives will result in more sales/volume.
So, Chuck, that would be a fourfold increase over the next seven years. Actually that is wrong. I was using half year numbers if I read your article correctly. That puts us at about 0.3% now. So, we are talking about doubling in seven years. That sounds about right.
I understand the need for all of this financial talk when it comes to EVs, but I think the big picture and the benefits that have nothing to do with money need to come into play when you talk about incentive to buy one. Think of over the long term how much more environmentally friendly it is to eliminate emissions of gasoline-powered cars, and think of the money that will be saved in gasoline bills. EVs are more than just a question of money, in my opinion.
EV's don't need subsudies, just put the present massive subsidies, costs of oil in it and EV's easily win. Mostly it's the cost of protecting international oil companies/oil wars we now do for free since repubs won't make those who are responsible for the cost, pay it.
Instead YOU get 30% higher income taxes. And you thought repubs were against higher taxes ;^P
EV's also need companies that want them to succeed like Tesla. And mine and many others are coming soon.
I've costed out a nice composite 2 seat 80 mph, 80 mile range with an unlimited range generator option using medium tech and lead batteries can be built with a 20% profit for $10k in 20k/yr production.
Every 5-7 yrs you'd have your batteries reformed into new ones for a fee cuts battery cost way down.
But big auto doesn't want a car that lasts forever and needs few parts for replacement with only 1 moving part in the motor and no transm,ission or the many other systems needed to keep an ICE running.
I build my EV prototypes for under $2k shows how low cost they really are if you want to.
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