When faced with electric car sales in the doldrums, automakers did the smart thing — they cut the price. You can now lease the Fiat 500e, Smart Electric Drive and the Chevrolet Spark EV for an eye-popping $199 per month, with three years to pay. And the Honda Fit EV (pictured below in blue) is available for $259 a month (a price that includes a very valuable garage charger, unlimited mileage and no money down). And the cars (including the Smart Electric Drive, seen below in European guise) are heading out of the door as fast as the factories can spit them out.
This is a good problem for EV companies to have. Until recently, they were watching battery cars pile up on the dealer lots, which is ultimately fatal for carmakers that turn out a lot of gas guzzlers. After all, the major automakers are compelled by the double whammy of federal fuel economy rules that require them to reach a fleet average of 54.5 mpg by 2025, and California’s escalating zero-emission vehicle mandates, also pegged to 2025, that aim for 1.5 million electric and hydrogen cars on state roads.
The fed standards are hard to meet unless zero emission cars are a significant part of your mix, and with California’s singular approach, you don’t have any choice.
According to Jack Nerad, executive market analyst at Kelley Blue Book, “This whole thing is really a reaction to California’s idiosyncratic approach to zero-emission cars. The automakers are just trying to check that EV box, make certain that they’re compliant with the state rules, then go from there. And they’re willing to lose money — it’s just a question of how much they have to lose.”
California’s program also has a side benefit in aiding automakers like Tesla Motors that produce a lot of battery electrics. They can stockpile their state zero emission credits and sell them. In the first three months of 2013, Tesla raked in 12 percent of its $562 million, or $68 million, from offloading those credits. Tesla could make as much as $250 million from ZEV credits this year.
The whole situation adds up to a major opportunity for car buyers. As Crazy Eddie used to say, “These deals are insaaaaane!” And they may not stay this low for long. The simplest way to put it is that carmakers will do anything to get you in the driver’s seat, and that includes loss-leader offers like these. And they’re doing the trick — in California, where demand is highest, they can’t keep electric cars (like the Fiat 500e below) in stock.
Paul Scott, the EV activist who recently was disinvited to a private meeting with President Obama, sells Nissan LEAFs in Santa Monica. “We’re getting low on inventory,” he told me. “We had over 40 LEAFs a couple months ago, but now we have less than 20. We could use more of the S model with quick charge — that’s a popular trim line.”
Southern California dealers are seeing heavy demand for battery-powered cars, now leasing for as little as $199 a month. Fiat’s new 500e has waiting lists even though it hasn’t hit dealer lots. And Honda dealers have already sold out on the Fit EV since a $259 lease was announced…A lease price war appears to have brought electric cars to a tipping point, engaging average consumers who shop on price in addition to eco-conscious buyers looking to make a statement.
Let's not get too excited here. Gartner also says, The temporary shortage of EVs for lease in California is more a factor of a small supply than a significant shift in demand," And, adds Nerad, “They’ve sold very few, so they’re really demanding some volume." Nerad really appreciates the bargains and is now considering a battery car as a third household vehicle “for my wife to run around in, but staying in the same ZIP code. At these lease prices it becomes pretty compelling. There’s no risk over resale value — really, no risk at all.”
On video, here's the case for the Fiat 500e:
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