Pricing the new all electric vehicles
Sunday, April 18th, 2010
By GUEST AUTHOR Mariana Gerzanych CEO | 350Green
San Diego won a 1 in 30,000 jackpot when it became a city that both GM Volt and Nissan Leaf electric cars will be introduced in this fall. Nissan dropped the price bomb last month, the war that promises to be fierce has begun. Leaf ended up at $20,280 MSRP after a $7,500 Federal Tax break and $5,000 CA Rax rebate (or a $349/month lease). The price astounded many, including competitors like Mitsubishi that immediately responded by dropping the price for their all-electric iMiev by $6,700.
Even though the Leaf is priced unexpectedly low, Nissan is still making a profit. The most expensive component of the car is the battery at $12K, which leaves $20K for the car itself. The Leaf is an all-electric vehicle with a 100 mile range, while GM Volt is a plug-in hybrid: after 40 all-electric miles an internal combustion engine extends the range to 300 miles.
GM’s price strategy remains a mystery. It gets interesting because Nissan will have a significant economy of scale advantage since it plans to build 50K Leafs globally in its first year, and ramp up to 200K by 2014. The price is a function of production volumes. The demand depends on the price; likewise the price they set depends on the supply (their production volume). GM is not planning to come even close to these production numbers, and demand for the Volt will by far outstrip the supply for quite a while.
Most likely the Volt will be priced higher and advertised as a different class of vehicles, since it’s a complex machine with twice as many parts. Initially consumers will be much more comfortable with a 300 mile range. As we move forward and the charging infrastructure is put into place, let’s hope that Nissan’s high volume plans do not short circuit the Volt.
Mariana Gerzanych is CEO of 350Green LLC, a Company that will be installing charging station infrastructure for Electric Cars. 350Green is a partner in the eTec $99.8 mill DOE grant award to electrify the EV infrastructure in 5 markets: San Diego, Portland, Seattle, Phoenix/Tucson and Nashville. “It took us all 5 seconds to decide which city to move the headquarters to” and San Diego has extended a warm welcome. You can find Mariana on Twitter @ukr50 and read more of her musings on www.350Green.com/news.
Sometimes it pays to be an early adapter. In August the U.S. Department of Energy 
