Auto companies in the United States are lowering lease prices for electric cars as they try to jump-start slow sales in a competitive market. Honda announced that it is also throwing in goodies such as unlimited mileage and a free home-charging station.
ASSOCIATED PRESS Enlarge
DETROIT — Auto companies are hoping lower lease prices can put a charge into sluggish electric car sales.
Honda announced Thursday that it’s slashing the monthly lease cost of its tiny Fit EV by one third, following similar moves by other automakers. Honda also is throwing in other goodies, such as a free home charging station and unlimited mileage.
Electric vehicles were billed as the answer to high gas prices and dependence on foreign oil. But U.S. oil production is rising and gasoline supplies are abundant. Pump prices have remained relatively stable the past three years, while gas-powered cars have gotten more efficient, making consumers reluctant to give them up.
There’s also the worry that an electric car could run out of juice on longer trips.
As a result, electric car sales are only a tiny fraction of overall U.S. auto sales. Automakers sold just over 12,000 pure-electric vehicles in the United States through April, according to Ward’s AutoInfoBank and Tesla Motors. That’s less than 1 percent of the 4.97 million cars and trucks sold during the same period. Even a $7,500 tax credit from the U.S. government that effectively lowers prices couldn’t persuade most car buyers.
Automakers need to create a market for the cars among buyers who won’t ordinarily go for the latest technology, said Larry Dominique, a former Nissan Motor Co. product chief.
“The early adopters are kind of phased out of the EV market. To get that broader appeal to the EV, they’re doing some pretty aggressive lease deals,” said Mr. Dominique, now an executive with the TrueCar.com auto pricing Web site.
The sluggish sales have dampened high expectations for electric car use. President Obama has said he wants to put 1 million plug-in electric vehicles on the road by 2015, but with two years left, the nation is far short of that goal.
With the Fit EV, Honda is offering a $259 per month lease, down $130 from the initial $389 per month offer when the car went on sale last July. The reduced price starts June 1 and will apply to existing Fit EV leases, Honda said. The three-year lease requires no money down and comes with unlimited mileage, free routine maintenance, collision insurance coverage, and a free 240-volt home charging station, the company said Thursday. The charging station normally costs $995. The car buyer must take care of installation.
Earlier this month, General Motors Co. said that it would lease the subcompact Spark EV for $199 per month with $999 due at signing as it goes on sale in California and Oregon. Nissan is offering a $199-per-month lease on its Leaf electric car with $1,999 down. That’s down from a high of $369 per month back in 2011.
Both the Spark and Leaf leases run for three years but have 12,000-mile annual limits on the number of miles one can drive without incurring mileage charges.
The lower lease prices put an electric car on par with a comparable small car. Automakers can offer the cheap lease deals on electric cars in part because they get the $7,500 tax credit.