Cleantech Market Intelligence
Incentives Needed to Drive EV Sales
Despite being in the midst of a financial apocalypse, California continues to find money to support the sale of electric vehicles. The California Air Resources Board just approved an additional $27 million in incentives to spur sales of hybrid and electric cars and trucks. The car rebates ($2,500 per vehicle) will put the price tag of the Leaf and Volt a bit closer to the price of comparable conventional models.
The high cost of being an early plug-in electric vehicle adopter has been one of the factors limiting vehicles thus far. As shown below, according to Pike Research’s consumer survey data, the optimal price point for selling a PEV where consumers would feel that they were neither too cheap nor too expensive is $23,750, which is $10,000-$15,000 or so less than current PEV price tags. It will likely take a few years to get there, once the cost of lithium ion batteries (which can add as much as $10,000 to the cost of a vehicle) goes down appreciably. According to DOE Secretary Steven Chu, that could take up to 10 years.
Electric Vehicle Price Sensitivity Analysis
(Source: Pike Research)
Tax credits are only one of the incentives that are being used to spur PEV sales, and that’s the topic of a session at the upcoming Plug-In 2012 conference in San Antonio on July 23-26 that I’ll be participating in.
For example, California’s granting of HOV lane access to the Chevrolet Volt has prompted a surge in sales in the state this year. Other incentives include providing preferential parking spots, and free or low-cost charging at retail locations or at campus parking lots, such as at the University of Texas. These combinations of incentives are key to driving sales at a local level, and I expect to hear more on this at Plug-in.
Trying to boost its flagging sales of the Leaf, which sold just 510 vehicles in the United States in May, Nissan recently dropped the price of a Leaf lease to under $300 per month. A rebound in sales in June would help the company, which plans to begin manufacturing the Leaf in Tennessee at the end of this year. Manufacturing the vehicles and assembling the battery packs locally rather than in Japan should help Nissan lower the cost of the vehicles in the United States.
Unfortunately for those down under, the government incentive that could have made the Leaf more affordable for Aussies was terminated, leaving a hefty price tag of $52,000 to drive electric. On the other end of the spectrum (and the globe) is Norway, which has sufficient incentives to make the Leaf a top-seller.