Well the electric vehicle price slashing is in full swing. The year opened with Nissan introducing a stripped down Leaf which comes in at $21300 after the $7500 federal tax credit and before license and destination charge. But it’s fair to say that one can easily pick up an EV for under 25K right now with a range of 75 miles.
For its part Chevy just announced that its 2014 model Volt will be $5,000 cheaper, coming in at $27,495 after the federal tax credit. Folks in some state like California can pick up additional state rebates of about $1500.
So what’s driving the price cuts? Slow sales are likely the biggest factor here although I suspect the production lines are gaining in efficiency and now that there’s reasonable volume, the automakers are getting discounts on key components like batteries.
Are the price cuts good news? Sort of. I never actually thought that EVs could sell at a price over $30,000 and really believe they’ll need to be under $25,000 to be sustainable from year to grow. To really hockey stick revenue, they’ll need to be under $25,000 with ranges over 200 miles, which is not possible right now.
The kicker with the Leaf’s rock bottom pricing is that assuming one drives 15,000 miles a year, the driver would save around $1800 on gas per year by switching to an EV. Over 5 years, that’s $9,000. So if you’re paying around $22K for the Leaf and saving $9,000 versus a gasoline powered car, is it fair to think of the actual cost of the Leaf as $14,000?