The Magic Price for New Electric Cars: $45,000

June 5, 2009

Mitsubishi announced today the price of the iMiEV, its small egg-shaped electric car that goes on sale next month in Japan: $45,660 at current exchange rates.

According to Mitsubishi, the car has a driving range of 100 miles, and can fully recharge in 14 hours on 100-volt power.

The new electric sedan from Coda Automotive—a spin-off from Miles Automotive—is expected to go on sale in the US next year. Miles revealed this week the price for the plain Jane Chinese-produced all-electric sedan: $45,000.

Definitive pricing is not yet established for the vaunted Chevy Volt—technically a series plug-in hybrid, but also referred to as an “extended range electric vehicle.” A few weeks ago, when GM’s Bob Lutz appeared on the Late Night with David Letterman, he said, “Our best estimate is right around $40,000.” Some analysts believe that when the vehicle hits the market the price could creep up to approximately…$45,000.

Image 01 height="350" />

Chevrolet Volt

All three of these vehicles would be eligible for federal tax credits of as much as $7,500—with the Japanese government’s incentive for the iMiEV expected at $14,500. While auto companies are not basing long-term pricing strategy of electric cars on tax credits, most analysts believe that finding a market for the next wave of electric cars (beyond highly motivated early adopters) will require government-provided consumer subsidies.


Posted in Economics
Tagged as

Related Readings

The Chevy Volt's #1 Fanboy

The Chevy Volt's #1 Fanboy

If you were to visualize the most enthusiastic supporter of the much-touted Chevrolet Volt—someone who rallies
  • 9691

    How exciting. I can’t believe I’m alive to see that. Let’s hope it will accelerate things for all of us.

  • Eric

    At prices like that it can never become mainstream…Hopefully with every maker jumping on the bandwagon, economies of scale will kick in quickly and make them affordable.

  • r4nd0mn4me

    Wow, $14,500? I hope Canada offers that kind of incentive, that would be awesome.

  • Tom Me

    It does give some clarity for purchasers. I’ve been rooting for the electric cars, and secretly lusting for one of my own. At these prices, I’d either go for the Volt, or keep my current gas sipper (17 year old saturn).. while waiting for the Tesla S/next wave of EVs.

    This leads to a couple of points.. for EVs to sell at $45,000 in volume, they can’t go after the economy market at present. And, there seems to be space for newcomers… there’s pricing power here, there’s whole classes of vehicles not represented even given the need to be light weight.

  • Halo9x

    At those prices I’ll keep my Prius!

  • RKRB

    Wow! $45K!! You could buy a Prius for that, and have $15,000 left over to give to the Nature Conservancy. I guess this ties in nicely with hybridcars’ recent article about converting an existing car to run on batteries. It’s hard to believe that what seems nothing more than a grown-up version of the D-cell battery-powered cars we all played with as kids could be so expensive and so complicated — until you try to do it yourself.

  • Max Reid

    Initially the Rich and the EV diehards will buy, if the price goes down, everyone will start buying.

    If the automakers ever intend to keep the prices above 40K, then people will go towards real people’s car like Tata Nano.

    Its coming to US in the next 2 years at $2,300.

  • Mike Rogers

    The only people who can afford to by them won’t want to.

  • steved28

    My first 4 function calculator cost $100 (used). Flat screen TV’s were $5K a few years ago. C’mon people, this industry is in it’s infancy. Give it a chance, it will evolve. No one said it would come out of the gate and be competitive.

    There are a lot of people out there with more money than they know what to do with. Just count the hummers and Escalades.

  • mdensch

    Uh, electric cars are hardly in their infancy. They have been around since the beginning of the auto industry. The fact is that after a hundred years, economical storage of electricity remains elusive.

    And as far as the previous comment about the Tata Nano, there is no possible way that the car could be sold in the US market in its current form. Meeting safety and emissions regs are going to quadruple the price, at least. C’mon, in the home market those things don’t even have heaters, let alone A/C.

  • Anonymous

    we don’t have any choice. When peak oil hits we will all be walking otherwise.

  • Anonymous

    How much energy will this actually save? Coal or something is being processed to create the energy to push to your wall outlet to charge these things.

    Any ideas?

  • OST

    This is why the wind/solar energy push is so important. Once we get those initiatives going, we’ll be in good shape.

  • Anonymous

    if you consider that most cars are stationary in traffic jams but still burning fuel they must save some energy.

  • Troy Parrott

    I think that all are WAY over priced compared to the Tesla S http://www.teslamotors.com, which will offer as a base a 200 mile range, zero to 60 in 5.6 seconds, 45 min quick charge time and an absolutely gorgeous car. In design, luxury and technology compared to the cars mentioned in this piece it is like comparing a Ferrari to a Skoda. The Fiskar Karma is slightly more impressive but also far more expensive.

    Daimler just took 10% of Tesla (top VC firms and the founder own most of the rest of the company) so even though the Model S is still an estimated two years away from release, Daimler’s involvement makes it even more likely that it will make it to market. Tesla will provide its batteries to Daimlers upcoming electric Smart car so if their business becomes sustainable through investments like Daimler, their current Roadster sales and future battery sales then we will see the Model S. They are also awaiting a $450 million dollar loan from the US Department of Transportation to set up an assembly plant in California which will make the release of the Model S a slam dunk.

    The Model S will be another example of “out-industry” ingenuity and design prowess. Just like Apple in consumer electronics, Tesla and Fiskar are close to breaking down the “laws” of the conventional automotive industry.

    $40K for a Volt, $45K for a Coda or Mitsubishi? Take a look at the Tesla and their pricier competitor the Fiskar Karma (www.fiskarautomotive.com).

    And yes we still use coal to produce most of our electricity in the USA. The comparison that we don’t use when looking at electric vehicles compared to gas/diesel is the energy used to extract the oil, refine it and deliver it to the sales point. The full analysis shows that electricity generated for these cars, even when produced by coal, offers not only far lower operating expenses for the user but more importantly, far less impact on our environment.

    A final thought that I often don’t see communicated is that the electric motor is amazingly reliable and simple in its design. The cars still need brakes, airconditioning, transmission and electronics that can go awry but all of the issues with relatively complex fossil fuel, bio-fuel, hydrogen or other motors go away. Great torque, great reliability and simple!

  • DJB

    I agree with a previous comment to the effect that the price is too high for these cars to go mainstream now, but with economies of scale the price can be reduced dramatically (i.e. as the fixed cost of a factory is spread over more units of production).

    It’ll take some pioneers to get us going with electric cars at these prices, but in the long run, we have to take bold steps like these if we expect to combat climate change effectively.

    In the meantime, let’s not forget that a lot of progress can be made reducing vehicle miles traveled in the first place through dense, mixed-use urban design.

    If you build places where everything is far away and it’s hard to walk, bike, and use transit, don’t be surprised when everybody drives everywhere.

  • crookmatt

    This is why I think Hybrid cars are ultimately so important. Companies need the prospect of making a profit if they are going to have enough incentive to put real R&D money into electric cars. $45K is out of most peoples price range, especially when you can purchase a very nice, fully loaded hybrid that only burns a couple grand of fuel each year.

    However as companies (Especially Toyota, Honda and Ford) continue to develop their electric car technology via hybrids, the $45K price tag will come down, while at the same time their performance and driving range will increase. Unfortunately this may take a couple decades (much like solar which is just now on the verge of reaching price parity with fossil fuels)

    So even if you don’t buy an EV vehicle today, by buying a hybrid gas/electric, in my opinion, you’re still doing you’re part to bring about a pure EV future.

  • Lost Prius to wife

    I agree with most of the comments that the EV is now in its expensive infancy. But do not forget that some car manufactures are already looking to the future. The third generation Prius is already wired to replace the existing NiMH with the upgraded lithium batteries once Toyota has decided which type provides the best reliability / cost for the Prius. My best friend even thinks that in the future one will be able to drive into a battery service station, hoist the car up, drop out the old underperforming battery pack, plug-in the new one, and be on one’s way in a matter of minutes.

  • Eric

    Electric motorcycles? There are a few out for less than $15,000.

  • David

    A Volt at $40K with a $7500 tax credit is suddenly a $32,500 car. I think it’s competing with the Camry Hybrid more than the Prius.

    Does anyone know offhand what the interior dimension of a Volt are? What kind of car it’s close to on the INside? I’ve heard everything from Cruze to Malibu-sized (and even ‘Prius’ sized on the outside)

    And the guy who was promoting the Tesla S? Sorry. It doesn’t have the range for trips to the mountains or a day-trip to NYC (235 miles from my house) and it’s $10K more than a Volt.

    Now, put a backup power source in the Tesla and you have a competitor.

  • Need2Change

    I agree with Steved28, these are early adopter prices.

    The first CD player that I saw cost $1700, and CDs were $25. Records sold for about $5 at the time. I waited until the price dropped to $600 before I bought my first CD player. Now there’s $20 CD players.

    I was an early DVD adopter. I paid $1500 for my first DVD player. The $100 DVD players today are probably superior to my first DVD player.

    What the article does not say is that Mitsubishi also stated that once volume picks up, they expect the base price of the MiEV to be about $20K. It’s competitive at that price, and it will probably be a better car than the $45K first edition.

  • Need2Change

    To me, I rather have a $40K-$45K Volt, than a $46K MiEV.

  • Lost Prius to wife

    David, it is my understanding that the Chevy Volt will be in the Camry category but slightly bigger than the Camry.

    Also, a fully loaded gen III Prius will cost ~$35K (tax added in) for our area of Colorado. Of course, one could buy the base gen III Prius (type II; ~$22K + tax) or wait for the Prius type I (~$21K + tax). I suspect the Prius type I may be a modified gen II Prius with limited options. No real R&D, no new tooling costs, and previously designed parts would allow the approximate ~$21K price tag. This would still give customers a hybrid that is capable of 48 mpg while allowing Toyota to have a profitable car to sell.

  • Mike F

    Ya, a little expensive now but I remember I bougt my first destop computer in 1999 and it was nearly $1000 and it was just a gateway. Now you can buy most desktops for under $500. Give these some time and I think $18,000-$30,000 will be achieved. Man I would really like to have an electric car.

  • Auto Parts

    I hear that Tesla is shooting for a new model in the 30k range. If they can hit that and make it look good, unlike most stuff in that price range they will have a potential hit on their hands.

  • tapra1

    car to run on batteries. It’s hard to believe that what seems nothing more than a grown-up version of the D-cell.jjwyy