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.