Slow sales sparking EV pricing war

As electric vehicles continue to languish on dealer lots, the industry could be setting up for the start of an EV pricing war.

Now that EVs have been in the market place for a couple of years, initial demand from early adopters has been satisfied, leaving it up to the general population to proliferate the sales of electric vehicles. However, typical car buyers aren't flocking to EV showrooms in the numbers automakers had expected, setting the stage for an all-out pricing war.

After a couple of disappointing years on the market, Nissan recently reduced the price of its Leaf EV from $35,200 to $28,800. The results have so far been positive – Leaf sales are up by triple digits this year -- and could be the blueprint for EV sales moving forward.

Honda has joined Nissan in discounting its electric vehicle, the Fit EV, but the Japanese automaker is concerned about the damages an EV pricing war might inflict on the industry.

"What concerns me most is that we'll have a situation of excess supply, creating artificially low prices, and [attracting] people who might not be best suited for an EV," Steve Center, American Honda's head of environmental business development, told Automotive News. "Then you will get a certain percentage of people who are going to be dissatisfied with the EV experience, and that will damage that option going forward."

The momentum towards EV discounting might be too much to stop at this point. Both Toyota and Mitsubishi have offered as much as $10,000 of the list prices of their electric vehicles, the RAV4 EV and i-MiEV. Ford has trimmed $2,000 off the price of its slow-selling Focus Electric, and both Chevrolet and Fiat are offering a bargain-basement lease deal of $199 per month for their Spark EV and 500e plug-ins.

There is no question that a pricing war is beginning to rage, but it remains to be seen if anyone will emerge on the other side as a true victor.