How the 2013 Nissan LEAF price reduction will influence the EV market

A closer look at EVs in the US

With the introduction of the 2013 LEAF, Nissan has changed the envelope within which all electric vehicles (EVs) in the United States must now compete. Here’s why.

First, we should note that we are talking about pure electric vehicles. We are not including plug-in hybrids in this analysis. The following table lists currently (or soon to be) available EVs in the United States, with their starting Manufacturer’s Suggested Retail Price (MSRP), along with their range as listed by the Environmental Protection Agency (EPA). It is not an all encompassing list.

¹ Lease only – starting at $389/month – 36 months ²Pricing announced as under $25,000 after federal incentive ³ 2012 Model – 2013 LEAF not yet certified

Yes, we know that there are other electric vehicles in the market, including the BMW ActiveE, and the Scion iQ EV. The BMW ActiveE is currently in a limited availability, lease only program. We wrote about the ActiveE when it first became available (found here).  700 ActiveE’s have been leased in 5 select markets for $499 per month for 24 months. This is a similar field trial to what BMW did with the MINI E all electric MINI. These studies were undertaken by BMW to  gain insight into the EV market, and to learn about how their customers might use the cars. BMW also expects to learn how the cars perform in real-world environments. The allotment of 700 cars for the US market is already spoken for. The Scion iQ EV will not be offered to the public. Toyota has restricted its release to car sharing programs targeting urban and campus environments. With its battery capacity of half that of the LEAF, EPA range is 38 miles. We expect that should it be offered to the public, there would be very little interest.

Looking at the table above, the most serious competitor to the LEAF appears to be the Mitsubishi i-MiEV. With a starting price just $325 more than the Nissan, it would seem to be the closest competitor. That said, a look at the EPA website (found here) shows that the LEAF is classified as a midsize car, while the i-MiEV is classified as a compact. Also, a fact that could prove key to some buyers, the Mitsu is restricted to four occupants, while the LEAF is a five-seater. You can read about our drive in the Mitsubishi here. Overall we found the quality of the i to be less than that found in the LEAF, but to be fair, we have not seen the interior materials of the new 2013 LEAF S.

We haven’t had the experience of driving the Ford Focus Electric, but it seems to be the closest to the Nissan LEAF in terms of size, power, and range. The biggest economic factor to consider here is the additional $10,400 required to own said Ford. Ford’s current lease offer for the Focus Electric is $306 per month for 36 months. Nissan will be offering the LEAF S for as little as $199 per month for 36 months. And that is where we think that the LEAF will start to make inroads into the driveways and garages of more and more customers.

Most people that we know spend more than $50 each week on gasoline – or the equivalent of what a LEAF monthly lease payment could be. This expense is in addition to their car payments, which can range from $300 per month to well over $600 per month. The single biggest driving factor in the vast majority of new vehicle purchases today is fuel economy. Watch television for anything over a few minutes and you are bound to see some car company or another touting their 40 mile per gallon offerings. This new LEAF S offers, for the first time, a viable alternative for many families that could not have considered an electric car before based on purely economic parameters. In addition to the monthly lease payment, charging costs will be reduced to a fraction of what most are paying for gasoline. Now the argument is seriously leaning in the direction of “How can you afford to continue driving your gasoline powered vehicle?” Granted – an EV is not right for everyone. If the first question that someone asks us is “How far can it go?”, our response has become “If driving distance is your most important factor, don’t even consider buying an EV. Yet.” But as we know, most individuals daily driving requirements can be more than adequately met by the LEAF, or almost any of the other vehicles listed in the table above.

If you own a LEAF, you should ask friends and neighbors (and friendly strangers at the grocery store) if they would like to drive it. As they stop to talk with you about your car, insist that they get behind the wheel and take it for a spin around the block. Without fail, the responses that we have received from our driving guests have varied from surprise to delight. We have yet to find anyone that did not enjoy the experience. This is how to engender positive experiences with this still new technology. As more individuals experience first hand what an electric car is (and what it is not), they are more likely to consider one as a future vehicle in their personal fleet – be it one or many. Certainly, we feel that this new price point will bring significant positive attention to the EV movement. Now hopefully Nissan will provide a significant availability of affordable S models and continue with their lease support as the Tennessee production of the LEAF ramps up.