The American auto market has rebounded in a big way, with pent-up demand for new vehicles pushing many companies towards record-breaking quarters. But a big sticking point among new car buyers remains pricing, and automakers are still working to get their entry-level electric cars under the magical $25,000 price point.
Navigant Research conducted a study on electric cars and came away with some interesting results and expectations. For one, it found that regardless of drivetrain, 71% of new car customers surveyed plan to spend less than $25,000 on their next vehicle, and 43% are going to spend less than $20,000. That leaves many EVs outside that “sweet spot”, though the Nissan Leaf is experiecing a surge in sales that to a $6,400 price cut and $7,500 federal tax credit that brings the price down to just $22,150. This has led to an explosion in new electric car sales.
While 61% of consumers have a favorable opinion on electric cars, many still don’t know the options out there. As a result, Nissan Leaf sales are more than doubled, with sales exceeding 18,000 units so far in 2013, though overall EV sales are expected to reach just over 30,000 units for a year. Compare that with the Ford Focus Electric, which even with a $4,000 tax break still falls over the $25,000 threshold, and Ford has sold less than 3,000 of its EVs thus far.
What a difference a few dollars makes. But while battery costs are expected to come down another 33% or so by 2020, the expiration of the Federal tax credit is going to push those EV prices right back up, and the Nissan Leaf goes from sweet spot to almost $30,000 vehicle overnight. Other perks of electric car ownership, like free charging and parking, are bound to dry up too, though these efforts are helping get the EV news out.
It’s definitely an interesting reflection on the American car market as a whole though; despite record profits, most new car buyers can’t even afford a very expensive new car, and this sticking point could prove to be a bottleneck for EVs once the tax credits dry up.
Source: Automotive News