Ford Motor is slicing $4,000 from the base price of its Focus electric car, beginning with 2014 models that arrive at dealers within a few weeks.
That cuts the Focus EV’s base price to $35,995 including shipping.
Some buyers qualify for a $7,500 credit on federal income taxes, and states often have their own incentives for buying battery cars.
Ford says it hasn’t taken away any features as part of the cut. The automaker describes the lower-price 2014 Focus electric as “fully contented,” and says the cut was important to keep the car competitive.
Main electrified rivals have cut prices, and it’s apparently not a sign that healthy competition is doing what it’s supposed to — making things cheaper for buyers.
It’s closer to a “nobody wants ’em” scenario, analysts say.
“Market competition is not the force that is driving down prices. Rather it is simply the automakers responding to true market demand,” says Eric Lyman, vice president at auto research site TrueCar.com’s ALG unit.
“Simply put, aside from enthusiastic early adopters, consumers are not willing to buy as many EVs as the automakers are producing at the initial price points,” he says.
Karl Brauer, senior analyst at Kelley Blue Book, says, “Manufacturers are realizing that selling an electric car at a loss is better than not selling one at all.
“And because these vehicles still make up a tiny percentage of total sales these automakers can absorb the financial loss with minimal pain. But at some point electric cars will have to stand on their own in terms of generating a profit.
“In the meantime, if you’re a buyer looking to try out an electric car there are some excellent deals to be had,” Brauer says.
Ford’s move follows Nissan’s $6,400 price cut for the base Leaf electric, announced in January. That reduced Leaf’s starting price to $29,650 including shipping.
“Ford most likely saw the Leaf’s success following its price cut and wants to employ a similar strategy,” says Jessica Caldwell, senior analyst at research and car-shopping site Edmunds.com.
“There is a limited market for electric vehicles,” so price-cutting is about the only effective tactic, she says.
Nissan CEO Carlos Ghosn said at the time that Leaf sales were slow and the car needed pricing help. Nissan was able to trim so much by introducing a new base model, called Leaf S, with different standard equipment. And Nissan moved production of the car and its batteries to the U.S. from Japan, minimizing some costs and eliminating currency exchange risks.
Chevrolet in 2011 cut $1,000 from the base price of its Volt extended-range electric, but made previously standard navigation and other features optional. Then earlier this year, Chevy offered incentives of as much as $5,000 on Volts to jump-start sales.
The Department of Energy said last month that the electricity to recharge an electric car is far cheaper than gasoline or diesel fuel — about $1.14 to go the same distance as a gallon of gasoline, which averaged $3.50 nationwide Wednesday, according to travel consultants AAA.
But buyers remain wary of battery cars that usually go fewer than 100 miles without stopping for hours-long recharges. Conventional cars can go 300 miles or so before needing a five-minute fill-up at a gasoline station.
And the fuel-economy of conventional cars continues to rise, undercutting financial argument for electrics despite their inexpensive fuel costs.
Ford says it has sold 900 Focus EVs the first half this year, 177 of those last month, which was near the vehicle’s sales record of 180 in March. Focus electric’s been available nationwide only since the start of the year.
Those sales numbers make Focus EV a bit player in a minuscule segment. According to Autodata:
-Chevy has sold 9,855 Volts the first half, up 11.8% from a year ago.
-Nissan sold an almost identical 9,839 Leaf electrics the first half, more than triple year-ago sales.
