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Published on January 21st, 2013 | by Silvio Marcacci


Major Price Drops Coming For Electric Vehicles

January 21st, 2013 by  

High prices have always been a hurdle for electric vehicles – if they’re too expensive for average drivers to buy, wide-scale integration will never be possible. Fortunately, it looks like that axiom is about to change dramatically. 

Nissan Leaf EV

Nissan Leaf image via Shutterstock

Purchase prices for both top-selling electric vehicles, the Nissan Leaf and Chevy Volt, are set to plunge, potentially opening up emissions-free driving for a much wider class of drivers and turning a corner toward a sustainable transportation future. 

18% Price Cut For Nissan Leaf

Nissan first took the low-price pole position, announcing last week that the 2013 Leaf EV would start at a manufacturer suggested retail price (MSRP) of $28,800 for the entry-level S grade vehicle. 

This is an 18% reduction from the 2012 Leaf entry model’s $35,200 MSRP, and makes the 2013 Nissan Leaf S the lowest-priced five-passenger EV sold in America. But even better, consumers may now theoretically purchase a Leaf for as low as $18,800, depending on available federal and states tax credits. 

The two higher-end Leaf models, the SV and SL, will also see significant price drops in 2013 compared to 2012, with the SV falling 10% to $31,820 and the SL falling 6% to $34,840. Perhaps best of all, Nissan will assemble 2013 Leafs, battery packs, and electric motors at three facilities in Tennessee, supporting thousands of green jobs. 

“Thousands Cheaper” For Chevy Volt

Not to be outdone, General Motors announced it would introduce a similar price reduction for the Chevy Volt. GM’s North America president stated the company would take out “thousands of dollars” from the next-generation Volt. 

Improved battery pack and electric motor designs will allow the Volt’s cost-cutting move, but the exact pricing details are still to be finalized. Regardless, GM is setting its sights even higher, saying, “we will see the day when we have an affordable electric car that offers 300 miles of range with all the comfort and utility of a conventional vehicle.” 

High Price Concerns Eat EV Dust

US electric and hybrid vehicle sales rose 73% in 2012, making them the fastest-growing sector of the American auto industry, and sales are predicted to grow another 14% in 2013. 

While both the Volt and Leaf increased sales in 2012, with 23,461 and 9,819 sold respectively, they’ve still got many miles to go until they reach parity with internal-combustion engines. A recent study of EV perceptions among 2,300 drivers in 21 US cities showed sticker shock was considered a “major barrier” for new car buyers, even when savings from fuel economy were factored in.

But, now that prices are truly starting to fall within reach of the average American driver, prices could soon become just a speed bump for the EV industry.

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About the Author

Silvio is Principal at Marcacci Communications, a full-service clean energy and climate policy public relations company based in Oakland, CA.

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  • rarnedsoum

    Why all the chatter?
    You like a car? You buy it. That’s why its on the market.
    You don’t like it? Don’t buy it.
    To each his own.
    Just like iPhone vs Android. Soy milk or cow milk. Whole wheat or white bread.

    I used to think like Bob Wallace. Until I drove a LEAF.
    Who wants to drive something boring. Like a Prius. Even a 4 cyl Camry has more pickup.
    Sometimes, fun is a calculation that doesn’t add up in dollars and sense and mileage…
    I own 2 EVs and 2 ICEs. Nuff said.

    • Bob_Wallace

      How, exactly, does Bob Wallace’s thinking differ from yours?

  • These price reductions are made possible by exchange rate savings (moving production from Japan to the US) and the elimination of expensive features that used to be standard (alloy wheels and navigation system).

    Producing 10,000 units annually doesn’t garner any mass production savings.

    • Bob_Wallace

      Correct. Savings are savings. And whatever way the price of EVs can be cut the end result is a lower price which will mean higher sales.

      EV manufacturing will probably have to hit the 500,000 per year before EVs are as cheap to purchase as ICEVs. Of course due to their greatly cheaper cost to operate they are already as cheap over the vehicles lifetime as the average US car.

      And it’s quite likely that we’re seeing some price drops due to battery prices. We build more manufacturing capacity than the market could use which has caused battery manufacturers to cut their margins to almost zero in order to stay in business and be around when markets improve.

      Battery prices are currently assumed to be about $400/kWh.

      “Battery prices will be down to €180–200 per kWh for large-format battery cells in 2014/2015.”

      That’s $238 – 264/kWh.

      Around $200/kWh is where EVs will be very competitive with ICEVs.

      • EV’s are not as cheap as a comparable US car. I’ve done the math.

        • Bob_Wallace

          The average US car price is around $30k. The average US new car mileage is around 25 MPG. (You can look up more precise numbers if you need them.)

          The Nissan LEAF, without subsidies, clearly beats that $30k/25 MPG average ride.

          A Toyota Prius, selling for roughly $23k (lowest price model)and getting about 50 MPG is a better buy than a Nissan LEAF.

          Over a 12 year period the Prius will cost about $8k less to own and operate than an ‘old price’ LEAF without subsidies.

          At the LEAF’s new price point and including federal subsidies the LEAF wins. (I need to redo my spreadsheet to see by how much.)

          If you’re willing to drive an econobox then you will probably save some money over buying the LEAF. (I’ll run those numbers soon.)

          • Bob_Wallace

            BTW, I used no money down, 4%, 5 year financing. 3% inflation, $0.08/kWh electricity and $4/gallon gas. 12,000 annual miles driven.

            I did not include the higher maintenance costs of ICEV including more frequent brake rebuilds. I did include oil/filter change costs. And I included insurance but not registration and licensing fees.

          • So over 12 years the Leaf costs 50% more than it’s non electric counterpart, without tax dollars.

            I love the idea of electric cars by the way. I would consider buying one now except for the uncertainty when the battery is 10 years old.

            I think it will only be a few years before they are comparable.

          • Bob_Wallace

            That’s some excellent cherry-picking on your part.


            Tell me, who is going to ignore the federal subsidy and pay more to drive an econobox?

            You’ve been very active here today. Are you here to engage in honest discussion or are you trying out for a troll position?

          • This is an honest discussion. A Leaf and a Versa are the same car. Except the Versa costs much less, goes a few hundred miles further, and refills in 5% of the time.

            How did I cherry pick?

            You do realize they’re built on the same chassis?

          • Bob_Wallace

            The LEAF and the Versa are not the same car. One is an EV with a much better ride and impressive acceleration. The other is a bottom end ICEV.

            Range issues could cause some to choose the Versa over the LEAF, no one disputes that. EVs (except for the Tesla S) are currently range limited. If you need a long distance car then the LEAF is not appropriate.

            You can argue that the Versa takes less time to refill, but if you think about it for a moment you’ll realize the Versa takes far longer to refill in driver time.

            With the Versa you have to drive to the gas station. Often wait your turn at the pump. Then fill up.

            With the LEAF you plug in when you get home and unplug the next morning. Seconds.

            Or you install inductive charging and you do nothing other than park your car and go inside. Zero time.

            How did you cherry pick?

            I gave you a number of scenarios in which the LEAF is the same cost or cheaper to own and operate and you picked the one unrealistic one in which someone would purchase a LEAF and not take advantage of the federal subsidy.

            GM used to build their lowest cost stripped-down Chevy and their top of the line Cadillac on the same chassis. Did that make them the same car?

          • Which Caddy are you talking about?

            “Tell me, who is going to ignore the federal subsidy and pay more to drive an econobox?”

            Are you saying the Leaf is going to outsell either the Versa or the Prius this year?

            If not, then I’d say hundreds of thousands of people will do exactly that.

          • Bob_Wallace


            And the Chevrolet Suburban, Tahoe as the Cadillac Escalade.

            Who is going to purchase a LEAF and not use the federal subsidy.

          • The subsidy doesn’t magically make the car less expensive. That’s what the article is about and what we were supposed to be discussing. You would give Nissan props if the subsidy went to 16000 saying electric cars are coming down in price.

            You’re impossible.


          • Bob_Wallace

            Actually it is kinda magic.

            We use a modest amount of public money in order to get people adopting a new technology. They do and competition and economy of scale starts bringing the price.


            That’s a nice little twist of reality you make in your “You would ….” sentence. Childish, actually.

            This is the second time you’ve told us goodbye. Are you working up some sort of a James Brown act?

            Do we need to get a supply of capes to drape over your shoulder for each faux exit?

          • If I leave, I leave.

            Let’s not forget the money and lives the cafe standards cost.

          • It isn’t even close to magic, as evidenced by solindra, a123, fisker (in the very near future), etc.

            If a technology has economic merit, companies will invest appropriate amounts of money in them at the appropriate time.

            How is ethanol working out for us? We’ve been “investing” in some technologies for decades and decades. Some may eventually stand on their own. But they would have anyway. Just perhaps a few years later with a whole lot less waste.

          • Poor people who don’t pay taxes.

          • Bob_Wallace

            Poor people who don’t pay income taxes seldom purchase new cars. They will benefit when used EVs reach them some years later.

            BTW, poor working people who don’t pay income taxes do pay significant amounts of taxes in other ways. Payroll taxes, property taxes, sales taxes, fuel prices, etc.

          • Those taxes are not available for use to get them back in the form of tax credits…only income tax is.
            Please know enough to not irritate the other posters who have actually put a pencil to these issues, ok?

          • Bob_Wallace

            You missed something critical in the discussion Stan.

            Give it a re-read.

        • Bob_Wallace

          OK, I plugged in updated numbers.

          LEAF vs. Prius

          A Nissan LEAF and the lowest model Prius would cost approximately the same to own and operate over a 12 year lifespan.

          Including the federal subsidy the LEAF would cost about $10k less to own and operate.

          LEAF vs. Econobox

          The Versa is about as cheap as new cars come and I used the lowest model price.

          A Nissan LEAF without subsidies would cost about $6k more to own and operate than a $11,900, 30 MPG Nissan Versa over a 12 year lifetime.

          A Nissasn LEAF with the federal subsidy would cost about $9k less to own and operate.

          The LEAF needs to decrease about $3k more and, without subsidies, it would cost about the same to own and operate as a Versa econobox.

  • Zer0Sum

    EV’s are cheap already. When the oil runs out the price of the EV’s that have already been manufactured is going to skyrocket.

    The problem is battery life not price.

    • Robert

      get a clue dude… oil isnt gonna run out in my lifetime… by that time if there r any of the EV that have already been manufactured on the road they will have a special license plate with the word “antique” or “classic” on it

      • Ronald Brak

        We seem to have run out of that $4 a barrel oil.

        • We ran out of $500 cars too. What does that mean?

  • I suspect between price gouging and battery prices coming down, this may be a step in the right direction….but it would be a lot more workable, if the Gov. subsidized the car company’s profit, than the buyers purchase money…..the car company doesn’t earn $7500 more per car than it should from inflated prices….more like an extra $3500…..just give to them….save $4000 right there…..the GP on a small car is very small, much less than many people think….the company makes at least 3 times as much as the dealer. Otherwise, it wouldn’t be able to fund warranties, advertising, and R&D.

  • davidrn

    Government (better known as taxpayers) subsides is not a true price reduction. The real market place decides the true price of a product.

    • bobbleheadguru

      There really is no “real market”.

      The government corporate welfare to Big Oil is $30,000,000,000 per year (includes tax credits, military protection, infrastructure spending and oil spill cleanups).

      Take away the “pennies” to EVs and the “$100 bills” to Big Oil and you are left with a level playing field where gas is $5/gallon and EVs breakeven math is quite favorable

      Ironically, proponents of EVs might like that deal. But, would the average consumer?

      • Bobble. The U.S. consumes 294 billion gallons of refined product per year.

        So your $30 billion number comes to about ten cents per gallon.

        Help me understand this better please.

    • Bob_Wallace

      Correct, David.

      But sometimes the market needs priming before it will start pumping. EVs will drop significantly in price when economies of scale kick in. But that takes getting sales numbers higher than the market alone will produce.

      It’s fairly common for the government to be the “earliest adopters” or in some other fashion support new technology in order to wake up the market.

      Recently we’ve seen price reductions for both the LEAF EV and Volt PHEV of thousands of dollars. Our subsidies are working. A few more years and we can phase them out and let the market work its magic without taxpayer help.

      Taxpayer subsidies have helped bring the price of wind-electricity from $0.38/kWh to around $0.05/kWh. They’ve help bring the price of solar panels from $100/watt to about $0.50/watt. 7x and 200x cost reductions.

      • You’re providing good evidence against yourself.

        The ethanol subsidy FINALLY went away, but the stuff still isn’t competitive. It is mandated. Yet there are tons of idle ethanol plants and many believe ethanol is partly to blame for high corn and livestock prices.

        On top of that, now even extreme environmentalists agree it isn’t a good substitute for oil.

        The government does a poor job of choosing our technologies.

        • Bob_Wallace

          Jeffery, did it get too cold under your bridge?

          You should know that ethanol is about creating income for large corporate corn farms, not solving our fuel problems.

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