ElectricForum.com report that over the last few weeks we have seen some significant
movement with regards to the price of electric vehicles in the US amid signs
that polarisation of industry is beginning. We have the likes of GM, Nissan,
Toyota and an array of other electric vehicle manufacturers looking towards the
volume end of the market while Tesla Motors and BMW, to name but two continue
to dominate the luxury end of the electric vehicle market.
Conclusion
The reality for many electric vehicle manufacturers is
that they are currently running at a loss on their EV offerings and are
unlikely to reduce prices any further without significant sales improvements. However,
there is no doubt that the EV market is now starting to hot up!
Some experts believe that we will see mass-market
penetration by 2017 although it seems as though some EV manufacturers are
looking to position themselves for an entry into the mass market in the short
term.
Luxury brands at luxury prices
If you look at the luxury end of the electric vehicle
market the names of Tesla Motors and BMW are the two which jump out at you
straight away. Despite the fact that we have seen price reductions with regards
to the Nissan Leaf, Toyota Fit and the Chevrolet Volt EV hybrid there has been
little or no movement with regards to the price of Tesla and BMW electric
vehicles.
Recent statistics suggest that the ever popular Tesla
Motors Model S is selling around 1500 units a month at the original price of
$70,000. The BMW i3 was only just released to the market although there is
little sign of the company reducing its price to increase sales. The reality is
that the likes of Tesla and BMW have made a living on luxury prices for luxury
products and a reduction in the price of their latest electric vehicles would
have a detrimental impact upon their reputations. These types of vehicles are
not aimed at the volume end of the market and despite the fact that Tesla plans
to introduce an affordable EV by 2017, it will for the time being be regarded
as a luxury electric vehicle manufacturer.
Volume sales at reduced prices
There has been much discussion with regards to the likes
of the Nissan Leaf, Toyota Fit and more recently the Chevrolet Volt with some
experts suggesting that these vehicles are loss-making at this moment in time.
The fact is that of the underlying parent companies have set their stalls out
to attract volume sales at reduced prices and while there may be short-term
losses until the electric vehicle market penetrates the mass-market, they seem
willing to take on this added burden for now.
It is difficult to forecast with any great confidence
when the electric vehicle market will penetrate the mass-market but the signs
are already there, a polarisation of the market between the volume end and the
luxury end and price adjustments across-the-board. Many of the future volume
electric vehicles will not only see an improvement in margins for high-volume
but there will also be efficiency savings and reduced technology expenditure.
This is what makes the market, offerings from the volume end right the way up
to the luxury end with companies emerging to fill in the gaps.
Are we on the verge of a price war?
In traditional markets you would suspect there was a
price war around the corner but the electric vehicle market is not quite
running at full capacity at the moment. Many of the companies operating in the
electric vehicle industry have significant excess capacity available as and
when the industry goes mass-market and while prices have been reduced on some
of the more popular vehicles, a price war to any great extent would not help
the industry or the individual manufacturers just now.
It will be interesting to monitor the price of all
electric vehicles in the coming months and the price of new entrants to the
market because recent US government statistics show that the rate of sales
growth across the EV industry is far higher than that seen in the hybrid
industry at a similar stage of development. EV sales are expected to double in
2013 compared to their 2012 level and grow significantly from 2013 onwards.
