As soon as somebody built a competing brewery across the street, you would likely reduce your price quite a bit.
So it is -- and will be -- with electric cars.
Be assured that the sticker prices being kicked around in the summer of 2010 are not necessarily written in stone.
General Motors Co.'s plan to lease its Volt extended range electric car for $350 a month reflects all sorts of bookkeeping calculations.
But it comes down to this: GM has priced the Volt's lease to compete nose-to-nose against Nissan North America's upcoming electric Leaf, which will lease for $349 a month -- even though the Volt retails for $8,000 more than the Leaf.
We've already seen Mitsubishi trim back the expected U.S. price of its i-MiEV electric car.
Nissan CEO Carlos Ghosn has repeatedly said that lithium-ion battery production costs are the tail that wags the dog on EV vehicle prices, and that those battery costs will come down sharply as mass production rises in the coming years.
Profit margins are a good thing in this business. Competition is good, too.