Many of the upcoming electric vehicles (EVs) are competitively priced only when one factors in government assistance. For example, the Leaf comes in at just $25,280, after the $7,500 federal tax credit. Take away the incentive, and it's an entirely different situation as the Leaf jumps up into BMW 3 Series territory. With that in mind, Nissan is concerned about the success of EVs after the incentives run out. We think it's a valid reason for worry, but one that's not worth losing any sleep over.
Here's how Nissan looks at it: the company took into account the existing incentives to price the Leaf competitively. In three years, many governments will slowly phase out incentives on EV purchases. As the government help is pared back, Nissan is worried the out-of-pocket cost for the Leaf will gradually rise and demand for the Leaf will wane.
Nissan's view might be a bit one-sided. In three years, battery prices will hopefully drop significantly due to economies of scale, thus driving down the cost of the EV. Over time, the cost to produce the vehicle will also drop, allowing manufacturers to lower prices and basically keep out-of-pocket expenses for consumers steady. In addition, demand for EVs should increase in three years and buyers might be willing to pay a bit more for one when they see the benefits their neighbors get by avoiding the gas station. While Nissan is right to think through what might happen when the government says "no more," we just don't see it becoming a real issue in the years ahead. Do you?