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Electric cars are getting as cheap as gasoline rivals

What would it take to get you into an electric car today?

Forced by state regulators to sell more zero-emission vehicles, automakers are tripping over each other to offer consumers rock-bottom lease deals. For the first time, electric vehicles are penciling out cheaper than their gas-powered counterparts.

Honda joined the price war this week by dropping the lease on its Fit EV from $389 to $259 a month. It threw in collision and vehicle theft coverage, maintenance, roadside assistance — even a charging station at your house. Factoring in a state rebate, a customer can drive off the lot with an all-in, three-year commitment of less than $7,000. That may make the Fit EV the cheapest $37,000 car in history.

Electric car comparison test: EV specifications

Still, the Honda will have to compete with recently announced $199-a-month leases on the Nissan Leaf, the Fiat 500e and the Chevrolet Spark. Ford is offering its Focus EV for $284 a month.

If you're looking to buy, state and federal incentives can shave as much as $10,000, nearly a third of the sticker price on a typical model. But automakers are promoting leases to ease consumer fears about maintenance costs and resale values.

Credit California's tough pollution laws for the EV price war. The California Air Resources Board has mandated that zero-emissions vehicles must account for 15% of all new vehicle sales by 2025, up from less than 1% now. That has automakers scrambling to get consumers into a set of green wheels, even though they are losing money on every car.

Video review: 2013 Honda Fit EV

So far, consumers have largely rejected battery-powered cars as expensive and impractical. Most run out of juice after about 80 miles; recharging takes hours.

Even in California — where the Toyota Prius hybrid is now the best-selling car — fully electric vehicles still sell in tiny volumes. Only about 15,000 have been sold in California since 2008, according to registration data from R.L. Polk & Co., the automotive consulting firm. Nationally, buyers have registered nearly 32,000 electric vehicles.

Palo Alto-based Tesla Motors Inc. has managed to carve out a successful niche selling high-end electric sport sedans — its Model S can cost more than $100,000. But lower-priced models from major automakers barely register on sales charts. Before slashing its lease price this week, Honda had sold a mere 174 Fit EV hatchbacks since July, according to the automaker.

Up to now, most buyers of expensive electric cars have been motivated by social concerns such as energy independence or the environment, said John O'Dell, a green car expert for auto information company Edmunds.com. The spate of cheap leases represents a play for average consumers.

"The bottom line is that, for the mass market, money drives the decision – what's in it for me?" O'Dell said. "If it's going to cost more for a vehicle that doesn't have the same utility, I'm not going to buy it."

From a public policy standpoint, the goal is to boost consumer demand in the nation's largest auto market, hoping that bigger sales can spur research and development to lower the technology's cost.

"As we move beyond early adopters to what we call 'fast followers,' economics and cost are going to play a bigger role," said Mike Ferry, transportation programs manager for the California Center for Sustainable Energy, a San Diego nonprofit that manages the state's zero-emission vehicle rebate program. "Engineering will get better, costs will come down, and consumer needs will be better met."

If most EV drivers are motivated by politics or finances, Matt Walton represents the exception. The Moorpark resident just loves their sharp handling and quick start off the line.

"I'm glad it's good for the environment," said Walton, 58. "But for me, I just like the driving experience. I had old British sports cars, and in the electrics, I really feel connected to the road in the same way those older vehicles were."

A retired medical equipment manager, Walton was willing to pay a staggering $850 a month back in 2009 to lease an electric Mini Cooper as part of a BMW test program. He moved on to a Honda Fit with a $389-a-month lease payment that was a bargain by comparison.

So Walker said he was "ecstatic" this week to learn Honda would automatically drop his payment to $259 to match what new customers will pay, and even more excited that Honda eliminated the 12,000 mileage limit.

"As a business decision, I have no idea why they did it," Walton said. "But I'm not complaining."

Whether an electric car works for you depends heavily on your driving needs. These cars have limited range — about 80 miles — and they take hours to recharge. To help you decide, we have driven and ranked these three leading entrants in the increasingly competitive micro-segment of the green car world.


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Anika Devi received her Bachelor’s degree in Media, Culture and Communication from New York University in 2012. She began freelancing for Business Solutions BD in 2010 and joined the team as a staff writer three years later. She currently serves as the assistant editor.
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