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Building (and buying) a cheaper electric car

The Tesla Model X is introduced at the 2013 North American International Auto Show in Detroit, Mich.

After scoring its first profit earlier this year, electric car maker Tesla Motors swung to a loss in the latest quarter. But it beat Wall Street estimates, reported big operating profit margins and sold more cars, 5,150 of its Model S’s, than ever.

That modest sales number is a reflection, in part, of the limited appeal of an electric car that starts at just under $70,000. Tesla CEO Elon Musk hopes to cut that price in half within four years to help realize what has always been his ambition: a truly affordable electric car.

That apparently already exists. You can buy an electric car today for under $20,000 -- if you’re in the right state.

Georgia is one of many that offer a tax credit for electric vehicles -- up to $5,000 off the sticker price.

“You get a lot more people who are interested, and that now becomes a vehicle that people can actually afford,” says William Cook, whose branch of the Georgia’s Environmental Protection Division oversees the program. Cook says that as of today, more people have applied for the tax credit in 2013 than in any previous year.

State credits come on top of a $7,500 federal income tax credit, as well as new manufacturer discounts. Earlier this year, Nissan cut the sticker price of its all-electric Leaf from $35,200 to $28,800. Chevrolet just cut the price of its Volt from $35,995 to $34,995. These prices make them more competitive, in particular with hybrids like the Toyota Prius (starting price: $24,200).

“By lowering the price, it gives us the opportunity to be on the shopping list of consumers,” says Chevrolet spokeswoman Michelle Melko.

But what about profits?

“Whether the manufacturers are making any money at that price… I don’t think so,” says John O’Dell, green car analyst at Edmunds.com.

Yet car companies to make electric vehicles in part because they are required to by several states, including California, the biggest car market in the U.S.

“There’s an incentive right there to build them even if you’re going to lose money on each one,” says O’Dell. “You make your money up on your high-profit stuff.”

 That “high-profit stuff” includes gas-guzzling pick-up trucks. But for the manufacturers that are investing heavily in zero-emission technology, low prices are also about creating a genuine market.

“More than all the advertising you can do, more than all the spiffs you can put on it, the thing that sells cars is when you see one in your neighbor’s garage,” O’Dell says.

Still, he thinks the day when electric cars can compete with their gas-powered counterparts for price-conscious buyers is decades away.

About the author

Stan Alcorn is a multimedia journalist in New York City. He has reported for NPR and WNYC, where he has focused on business and the New York tech scene.
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It is a nice post for all car lovers. No doubt electric cars are the latest invention in our automobile sector and environment friendly. Our government also appreciate it due to several reasons. Before it it is coast effective than other fuel car. Now electric cars are available in a suitable price in our automobile sector. We also found several charging sector in our country. With this electric car service center also trying to increasing its number. Thanks for give a good information.
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The electric cars are the talk of the time let it be any car company all the big fishes are focusing on producing Electric vehicle a recent survey have reveled that the Big fishes are investing a huge amount in research for Better Electric car. These cars are environment friendly as they produces lesser amount of pollution and as well comes at a lower price now as initially they were coming at a high price. The only prob which is there with these cars as of now is the fact that they needs a lot of care and you might have to go to a service center quite frequently.
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John O'Dell at Edmunds.com is one of the reasons why electric cars are considered to be decades away. He perpetuates the myth that they are unaffordable and impractical in 2013.

What we have is the classic what came first, the chicken or the egg. In the electric car story, the technology has been around since Edison and it was bumped out by Henry Ford. Demand for electric cars faded as demand for gas powered vehicles increased. The demand for electric cars must increase before manufacturers will mass produce them, or so we are told, but demand will not be there until they are mass produced and prices come down. That is the conundrum.

Once the consumer demands electric vehicles, the manufacturers will be forced to mass produce them and the costs should decrease, unless they inflate the prices to keep demand low. It seems like the auto makers prefer to produce gas guzzlers, rather than clean electric cars.

It is people like John O'Dell and groups like Edmunds.com that must promote and encourage electric vehicles if we are ever going to stimulate demand for them. Advocates for clean cars need all the help we can get to convince people that the dirty old technology of the combustion engine is not only harmful to our health because of emissions, but it also perpetuates the grasp that the oil industry has on the entire economic structure of the world.

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