Tuesday, 29 January, 2013. The Green Piece Column.
Could 2013 be the year when electric cars become much more affordable? With a number of lower priced models on the way as well as mature vehicle offerings slashing their prices, it sure looks like the market could be about to expand to a whole new audience.
Half the price
A new smart fortwo ED at dealerships now sets a new low for electric cars, available to UK buyers from as little as £12,275 (after Plug-in Car Grant) with a £55 month battery lease (more details here). Along with the much bigger and only slightly more expensive, Renault Zoe, which arrives later this year, this sure feels like the start of a more affordable era for the electric motoring.
The supermini ZOE, the fourth electric model in Renault’s ZE range, will arrive next spring with prices from £13,650 (after Plug-in Car Grant) (more info here).
These prices are around half of that of early models to the market, like the first generation LEAF (£25,990 after PiCG), Mitsubishi i-MiEV (£23,990 after PiCG) and Citroen C-Zero (£21,216 after PiCG).
If you opt to go down the quadricycle or electric motorbike route then of course prices can dip even further. Renault’s little Twizy quadricycle costs from just £6,690 with a battery lease of around £45 a month.
Existing models including the Nissan LEAF and Chevrolet Volt are soon to cut their prices too. While for the Volt, we’ll likely be waiting until 2014, the Nissan LEAF is already available for the new price of £23,490-£2,000 less and finance deals available with monthly payments as low as £239 a month.
There is also a growing market for electric cars on the second hand market too, with deals available on 2011 Nissan LEAFs from around £17,000 for a low mileage model.
If second-hand is not your thing then a lease deal maybe a good way to go electric. With monthly lease payments tending to be lower than those for an equivalent HP or PCP, leasing an electric car can make financial sense as well as freeing you from the concern of resale values. Toe-dipping into electric ownership , you could call it.
We’ve been having a look at finance rates; you can lease a Twizy from around £140+vat a month (3+35, 10k mpa annum contract), a Nissan LEAF for around £234+vat (6+23, 10k mpa contract) or a Mitsubishi i-MiEV for around £299+vat (6+47, 10k mpa contract). Finance deals means you can pay as little as £144+vat on the Citroen C-Zero.
And it is not just retail customers who will notice the fall in prices for electric vehicles, businesses which have so far been tempted to switch to EVs because of their low running costs, could soon bite once the upfront cost starts to drop.
Research suggests that this drop in prices, is helping tip the balance in favour of EVs as the upfront costs starts to present less of a barrier. With other costs lower for EVs; such as tax, parking and running costs, electric vehicles could actually help businesses save up to 75 per cent on ‘refuelling’ costs-making them well worth while, according to new report from the Plugged-in Fleets Intiative (see story).
Of course, some of the perks businesses currently experience are only available for a limited time. Just like the current Plug-in Car Grant worth up to £5,000, other current EV incentives could expire in 2015; that includes the current 100% first year write-down allowance (some changes actually come into force from April 2013, affecting leased vehicles over 95g/km CO2) and the favourable NiK and BiK arrangements.
Likewise we know other perks such as free parking and charging could be reduced at any time and as we’ve seen in the US, there is always the potential that lost revenue for fuel taxes will be clawed back through new taxes such as the new registration fee for electric cars in Washington.
But expect the rug of subsidies will be pulled gently from under the developing EV market and that it will happen in the face of continued rises in petrol prices. We’re confident that the stabilisers won’t be taken off too soon, and the market will stand on its own two feet.
If we really want to talk about levelling the playing field then it’s the subsidies for fossil fuels that we really need to pull. Subsidies for the gas, oil and coal industries were worth around $58.7 billion globally in 2011 (source: Oil Change International).
Removing such support would not only impact on the price of fuel at the pump- making electric cars look even more appealing-but would strengthen the market for renewable fuels. That would mean more wind, solar and tidal energy in our electricity grid, allowing electric cars to slash their long-tail emissions. It would be a win-win situation.
With a Conservative-led government though, does it seem likely that will happen? So far the Government’s record on green issues has been patchy at best. Actions such as halving the feed-in-tariff for low carbon micro-generation and approving fracking in Lancashire, suggest otherwise.
But while these wider issues about the balance of subsidies are still in the back of our mind, there is one thing that is certain; from the highs on which the EV market started a couple of years ago, the wheels are now in motion and the market is gaining traction; we’re heading definitely heading down price hill.
2013 will just be the start of a more affordable era.