General Motors announced last week that it will drop the base price of the 2014 edition of the Chevy Volt by $5,000, from $39,995 to $34,495. The move is one more sign of what could be called a price war on plug-in electric vehicles—between manufacturers competing to attract the next wave of customers to the small but growing market for cars powered by grid-supplied electricity.
Earlier this year, Nissan announced that it would drop the starting price of its LEAF all-electric sedan by $6,400, offering an entry-level edition for just $29,650 before federal and state incentives. Meanwhile, the lease prices on some other models like the Fiat 500e, the Chevy Spark EV and the Smart ForTwo Electric Drive have fallen below $200 per month.
Unlike the LEAF, the 2014 Chevy Volt price cut will not come as a result of cuts to the list of standard features on the car. In fact, Chevy will be adding a standard leather-wrapped steering wheel to the package in addition to a few minor tweaks to the interior. Heated seats—and two new color options—will also now be available for all trim levels.
By reducing its price, GM will bring the Volt into reach of a wider market. Thanks to a $7,500 federal tax credit for plug-ins, the final cost of the car will drop to just $27,495 nationwide. In many states, including California, Pennsylvania and Colorado, the net price will be even lower, thanks to local incentives.
For shoppers keen on purchasing a plug-in hybrid, the Volt competes with the Toyota Prius Plug-in (which offers a shorter electric range at a higher price tag than the Volt) and Ford’s C-Max and Fusion Energi models. Perhaps in reaction to Chevy’s move, Ford last week announced a new round of price cuts to both models: the Fusion Energi will now start at just $36,595, and the C-Max will get a $1,250 reduction. Still, Chevy will retain a price advantage since neither plug-in is eligible for the full $7,500 federal credit due to less electric capability.
Cars like the LEAF and Volt are becoming increasingly price-competitive with gasoline-only cars in their class—even without thinking about savings at the pumps.
Maybe the recent wave of price cuts was planned all along and factored into the multi-year rollout plan for vehicles like the Volt, or maybe it became necessary to boost sales that have failed to live up to early hopes. Either way, the result is clear: when manufacturers slash prices to compete, consumers seeking a plug-in vehicle come out ahead.
Bradley Berman writes about electric cars and green transportation for the New York Times, KQED Public Media, Reuters, Mother Earth News, and other outlets and is a consultant to eBay Green Driving. He founded two green-car sites, HybridCars.com and PluginCars.com.