Prices of many electrified vehicles have fallen rapidly over the past year. General Motors' decision to chop $5,000 off the sticker of the 2014 Chevrolet Volt followed similar price slashing by Nissan, Ford, Daimler, Fiat and others.
At first glance, that looks like trouble for automakers struggling to recoup high investment and manufacturing costs. It's irritating to any EV customer who just spent much more to buy one. And it fuels critics of government subsidies of the technology.
But slashing prices brought just what the segment needed: volume. U.S. sales of electric vehicles and plug-in hybrids more than doubled to almost 49,000 units through July.
Automakers have long argued that as EV volume rose, manufacturing costs would fall. The new lower stickers and continued $7,500 federal tax credits suddenly put many EVs into the same price range as conventional cars.
It opens the EV segment to a broader range of buyers.
Government has a long-range goal to build EV sales. But the auto industry has even more at stake.
Every automaker must chart its own path to achieving a corporate average fuel economy rating of 54.5 mpg by the 2025 model year. For most, high-mileage EVs and their bonus federal credits have been a big part of the mix, so the segment's slow startup has been worrisome.
If EVs come up short, automakers must make it up with even more downsizing, weight reduction and fuel economy enhancements, with each new gain more costly than the last.
The recent EV sales surge is encouraging, but manufacturers must make the most of it. Now is the time to push for an EV breakthrough.