Slow sales causing electric vehicle makers to slash prices and add incentives

By John LeBlanc With almost five months of inventory sitting on its U.S. dealer lots — more than double the supply analysts’ say is normal — General Motors’ Chevrolet brand has started offering up to $5,000 U.S. dollars (USD) in purchase incentives on its Volt plug-in electric gas electric hybrid. Chevrolet U.S. spokeswoman Michelle Malcho said the Volt incentives were put in place to clear out older models before the 2014 versions start being delivered later this summer. But Chevy isn’t the only electric vehicle (EV) maker needing to bribe buyers into showrooms. Following the lead of its American counterparts, Nissan Canada just announced a new “entry-level” S trim for its all-electric Leaf. With an MSRP of $31,698 Canadian dollars (CD), the Leaf S is almost 17 per cent less expensive than the top-line $38,398 Leaf SL. And if you live in Ontario, Quebec or British Columbia, you get a further $8,500, $8,000 or $5,000, respectively, off the price of a Nissan LEAF via taxpayer incentives. In Canada, a 2013 Volt costs $42,000. The Ontario government offers the biggest rebate: $8,231. A look at the GM Canada site found no factory incentives. But south of the border, GM (with the help of generous governments) is almost giving the Volt away. From its original price of $39,995 USD, the new $5,000 USD discount on the U.S. Volt applies to leftover 2012 models, while 2013 versions get a $4,000 USD rebate. With taxpayer incentives, the Volt’s price drops even lower in some States. For example, California buyers can now buy a Volt for as little as little as $28,495. Despite the price drops, government rebates and factory-sponsored incentives, sales of both the Leaf and Volt aren’t living up to the expectations when both where launched with much fanfare in late-2010. For the first five months of 2013, a little over 7,000 Volts have been sold in the U.S. (318 in Canada); a far cry from the expected 45,000 annual take rate. While the Leaf’s poor sales in 2012 caused Nissan CEO Carlos Ghosn to call the EV “a disappointment for us.” Of course, the idea that both taxpayer and automaker moneys are needed to sell the Volt and Leaf says something about the basic laws of supply and demand. But are the price drops enough to make EVs a viable alternative to fossil fueled cars? Even if the Volt and Leaf were priced like a comparable Chevrolet Cruze or Nissan Sentra, would you still buy one? Sources: The Detroit News, The Detroit Bureau

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