Plug-In Pricing: The Real Numbers

By Bill Moore

Posted: 07 Oct 2009

According to Hybridcars.com, Toyota's Plug-in Prius, due out in 2012, will cost $48,000.  Now that's a sizable chunk of change, but not necessarily out of line with speculation vis a vis the Chevy Volt, the Coda, the second generation Fisker Karma, code named Project Nina, and the Tesla Model S.  All seem to be coming in somewhere well north of $40,000.

There's only one tiny problem, especially in the case of the Volt and the Prius, neither carmaker has officially set a price for the car.  GM long ago dismissed speculation that the Volt would cost $45,000.  It hasn't yet decided. It could be a lot less, as you'll learn in a minute.

As for the Prius, when I asked Toyota's Irv Miller, their VP for corporate communications about the $48,000 price tag, he simply responded, "it's interesting what you find on the Internet."  He added that Toyota hasn't even begun discussing retail pricing of the the plug-in version of the world's most popular hybrid car.  

It should be recognized that the sticker price on any vehicle may have very little to do with the actual cost of the vehicle. For years, industry wags asserted Toyota probably lost money on every Prius it sold, some speculating as much as $15,000 per copy.  Yet, Toyota kept building them and in relatively short order, came to dominate the market, clearly smiling all the way to the bank.

So, what a Plug-in Prius or a Chevy Volt sells for when they hit showrooms in 2012 and 2011 respectively could be far south of the the $40K boundary, especially if Congress remains in a generous mood in order to help out Government Motors (aka, the new General Motors, of which we Americans own a considerable stake, as does our Canadian brethren).

In this light, I got an interesting email from a long-time acquaintance and former GM executive who complemented me on the speech I gave in Montreal and added somewhat parenthetically:

"Assume you will trade in your Prius when the Volt becomes available.  The feds will probably put a $20,000 kickback on the price to move them.  If they do not, Volt will not make it."

Now $20,000 seems high, but when I spoke briefly with Michigan Senator Debbie Stabenow in Detroit in June at the official opening of GM's new battery test lab, she commented that the current $7,500 tax credit is probably too low and might need to be raised.  Before I could ask how much, her aide pulled her away to another meeting. 

If the nearly $15,000 of incentives the Japanese government offers on the Mitsubishi i-MiEV is any precedence, might we see a $10,000 or higher tax credit?  At the moment, there's no way of knowing, but I'd wager lobbyists are hard at work pushing for a higher number and other possible incentives to jump start the technology and make it affordable to the widest possible consumer market.

Of course, if Congress  limits any future incentives to American made plug-ins only, that poses problems for Toyota, who has postponed plans to build the Prius in the U.S.A.  

Bottom line: any pricing numbers you hear today, may not even come close to reflecting what you'll see on the sticker of any new PHEV, EREV, or BEV,  coming to a dealer showroom near you, regardless of manufacturer. We won't know the real number until a few weeks before the car goes on sale, and even then, it may not be the real number.   As with the EPA's fuel economy numbers, you're out-of-pocket cost may vary.

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