Do Electric Vehicle Price Drops Signal Doom or Boom?

Consumers can expect lower prices on EV (electric vehicles). Recently, Nissan lowered the Leaf’s price by $6,400. Chevy slashed the Volt’s price by $5,000, and Ford took $4,000 off the Fusion price tag. In response, sales for EVs are picking up. The Leaf and Volt set records for monthly sales in August 2013. What do EV price drops mean? Keep reading to find answers before you open your wallet and drive away with one.

Nissan’s Leaf

This past year, Nissan slashed prices on the Leaf. The car will carry an MSRP of $28,000 with tax incentives of $7,500 from the U.S. government and additional $2,500 credits in California. You can take one home for around $18,800, a price comparable to many mid-size sedans. Throw in the combined 115 mpg gas rating and 129 mpg, and car buyers can save hundreds more a month on gas, depending on how much you drive.

Nissan sold fewer Leafs than expected in 2012, and the company forecasts only a 20 percent rise in sales for 2013. Nissan sold 2,240 Leaf EVs in August alone, which is a 253 percent increase in sales over last year. Nissan is also adding the car to its pre-owned service, so check out a used car dealership if you want an even lower price.

Chevy’s Volt

 

Chevy also dropped its price substantially. GM announced the Volt would sell for $34,995 after the $5,000 price cut to compete with the Leaf. With the tax credit, buyers may potentially pay only $27,495, depending on their tax liabilities. Sales increased dramatically in August 2013 when GM announced a record setting month for Volt sales with 3,351 units sold, an 18 percent increase over last August.

Chevy’s Volt offers better range — and range has been a big concern since few electric charging stations exist. The car travels 900 miles between charges. The Nissan Leaf sold fewer vehicles and had a much larger increase of 253 percent over last year’s numbers. It’s clear price plays a big role in how many people buy EVs. You’ll save at the pump after all.

Honda’s Fit

 

Honda dropped the price on its Honda Fit EV by offering a three-year lease for only $259 a month, which is a $130 price drop. After the price drop, the car sold out in California, and dealers started a waiting list. The company plans to limit sales to just 1,100 cars, possibly for cost reasons.

Few were willing to spend the $389 a month on the Honda Fit EV. A reasonable lease rate competitive with other sedans and a free charging station were among the perks that sparked interest.

Another EV concern is battery life because EV batteries wear down and need to be replaced. This impacts resale value. According to the National Automobile Dealers Association, electric vehicles lose 30 percent of their original value after use, which is more than traditional gas cars.

Before the price cuts, consumers looked at big premiums to get into the gas-saving cars. Now that EVs are comparable in price to other vehicles, gas savings is a real attraction. Calculate your gas savings to see if an EV makes sense for you.