The high price of the Tesla Model S—about $60,000—is inhibiting more widespread adoption. But the more practice it gets making cars, and the more volume ramps up, the greater the ability to cut prices. This week, Tesla CEO Elon Musk said the company is aiming to produce a version of the Tesla that would retail for about $30,000 in “probably three to five years.”
Meanwhile, other electric and plug-in hybrid makers aren’t sitting still. With the advent of the Nissan Leaf, the Chevrolet Volt, the Tesla, and plug-in hybrids from Toyota and Ford, there are now more than a handful of cars on the market that rely in part, or entirely, on electricity. (Cadillac appears to be ++joining the fray++[ http://www.hybridcars.com/first-cadillac-elr-rolls-off-the-line/] as well.) And as they ramp up production and fight with each other for customers, they are effectively lowering the price of the vehicles.
So, for example, Nissan this year cut the sticker price of the Leaf to $28,000—a reduction of $6,400, or 18 percent. And that’s before the $7,500 federal tax credit. Last month, General Motors CEO Dan Akerson said that customers should expect that the Volt, which retails for about $39,000 before the federal tax credit, will get significantly cheaper. “In this next generation, we think we can decrease the price on the order of $7,000 to $10,000, without decontenting,” he said.