Compare the Market, a UK-based car insurance comparison website, looked up the price of a Nissan Leaf in 49 countries. It pulled the offered price right from the official Nissan website of the latest model in February 2020. The lowest price was $28,620 in Spain. The steepest Leaf price was in Singapore at $110,326.
The difference in cost has almost nothing to do with Nissan — and everything to do with a government’s vehicle tax and incentive structure.
Compare the Market explains that it’s an unscientific study. The firm just grabbed the manufacturer’s suggested retail price from dealership websites, so other taxes and levies may apply. Some countries include EV tax discounts on the price, while others might have incentives to bring the price much lower than what’s listed on the website.
If it reveals anything, it’s how willing a country is to consider a vehicle a luxury item — and one that deserves to be taxed because it emits pollution.
In terms of encouraging EV sales, the face-value price listed in the study is less important than the difference between the electric car and a similar gas car.
Here are the top 10 and bottom 10 prices. You can visit Compare the Market for the entire list.
Singapore is the outlier at $110,326. (As you can see, Compare the Market converted the prices to euros, pounds, and dollars.)
We first need to get our act together on pricing in the carbon costs of regular cars and provide more information on where the charging points are across the island.
EVs need a level playing field where the cost of externalities arising from tailpipe emissions, such as healthcare costs, productivity loss, and so on, are factored in.
Pricing in these costs will mean the rebates provided under the Vehicle Emission Scheme should be as much as twice the car’s Certificate of Entitlement value.
The Leaf comparison shows the price of Nissan’s EV in Norway at $31,439. That’s only about $200 less than the price in the US. But it’s way cheaper than a comparable gas car in Norway.
Norway extended the exemption of its 25% value-added tax for EV until the end of 2021. In other words, gas cars get a steep extra tax that is not applied to an electric vehicle.
When I visited Oslo last year, I met with Christina Bu, the Norwegian Electric Vehicle Association chief executive. She thinks price parity is the solution to massive EV adoption.
We get the question all the time: Why is it working in Norway? It’s a simple answer. The price is more or less level.
The Norwegian Electric Vehicle Association shared this chart from last year. A gas Golf versus an e-Golf serves as a good comparison. Remove the VAT and you get parity.
Bu understands that what Norway is doing can’t be copied everywhere in the world. But she believes that reduced battery costs over time will lead us to price parity in the future. In the meantime, she says:
If you can do a little bit more, it’s a lot better than doing nothing. You will get price parity on a global level faster than most people understand.
The MSRP of the Nissan Leaf is surprisingly high in Germany: $40,664. That’s more expensive than the price of an average Germany car by about $3,000. But electric vehicles in Germany are currently subsidized with a €4,000 ($4,437) grant — so that likely creates the parity that Norway has.
This issue is a lot more complicated than just pulling sales prices off a website.
For example, in the US, there’s an unlevel playing field. The $7,500 federal tax credit is gone for Tesla and General Motors, but is still in place for all other carmakers including Nissan. California buyers get attractive rebates not commonly available in other states.
And who knows how the pandemic will affect everything?
In the short term, there’s still a global need for removing value-add taxes or offering purchase incentives. But the price of batteries and other components keeps coming down. The coveted goal of a price parity is not a question of if, but when. It’s just a matter of time before EVs supplant gas cars all over the world.
FTC: We use income earning auto affiliate links. More.