LOS ANGELES, Nov. 30 /PRNewswire/ -- If automakers treat electric vehicles the same way they do their conventional cars and trucks, the electric vehicles (EVs) that will be introduced in California (and possibly other states) starting next year can be priced competitively with their gasoline-powered counterparts, according to a just-released study.
"Current EV cost and price estimates from the major automakers are arbitrarily high," said Ron Cogan, one of the report's authors. He added that EVs could be treated like other industry programs, for example, Chrysler's Viper, where substantial development costs were both absorbed under corporate programs and shared with outside suppliers.
"We found the automakers' price statements on electric vehicles to be critical since they are used as the basis for the companies' disappointing market projections," said study co-author Michael Coates. "If EV prices are competitive with gasoline vehicles, their market potential is significantly stronger than the automakers have predicted so far."
The study, "Pricing For Success: Using Auto Industry Models to Review Electric Vehicle Costing and Pricing," was compiled by Green Car Media, an independent alternative fuel research organization. It reviewed historic vehicle costing and pricing practices long used by the auto industry both for vehicles and individual components such as airbags, catalytic converters and emissions control equipment.
The study found that market and marketing considerations have led auto companies in the past to absorb high vehicle research and development costs, while keeping vehicle retail prices competitive. Examples cited were the development of General Motors' Saturn, Chrysler's Viper, and Ford's just-introduced 1996 Taurus/Sable. In each case, the true development costs were not amortized in the vehicle's initial price. Other less tangible considerations, such as corporate image and positioning, also were shown to be a factor in the automakers' pricing decisions.
In mid-November the seven auto companies affected by California's 1998 zero-emission vehicle (ZEV) regulation -- which requires that 2% of the vehicles they offer for sale in California emit zero tailpipe emissions -- presented a plan to start manufacturing and offering for sale ZEVs as early as next year in exchange for relaxation of the 2% requirement.
The California Air Resources Board is considering modifying the ZEV rule even as the automakers are indicating that in their current state ZEVs could cost many thousands of dollars more than their gasoline- powered counterparts. This study shows that such pricing scenarios do not represent the only path likely for ZEV introduction.
Green Car Media's study was led by a group of experienced
automotive industry figures: Ron Cogan, Motor Trend Magazine's
enviromotive editor, co-founder of the respected industry publication,
Green Car Journal, and a recognized expert in alternative fuel
vehicles; Michael Coates, former western regional public
relations manager for Chrysler Corporation, a veteran automotive
marketing/public relations manager and journalist; David Gautreau,
co-founder of Green Car Journal and an expert in alternative fuel
vehicle marketing; and Stuart McGillivray, managing editor of
Green Car Journal and a contributor to Motor Trend and other
publications.
CO: Green Car Media ST: California IN: AUT ENV SU:
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