Volt versus LEAF: A Case Study in Preventing Price Gouging

By · August 09, 2010

Chevy Volt and Nissan LEAF

As our contributors continue to repeat, there’s no reason for Chevy Volt fans and Nissan LEAF fans to wage a battle against one another. At the end of the day, we all want to see a successful introduction of cars that use little or no petroleum. The two leading plug-in cars each have their pros and cons in terms of design and technology—and will appeal to different drivers for different reasons.

Yet, we’re starting to see a clear picture of how seemingly minor decisions by G.M. and Nissan can make a huge difference in the purchase process. Let’s recap, to make these distinctions as clear as possible.

G.M.'s Process: The dealers are in control.

General Motors took a decentralized approach to Volt ordering. By leaving it up to interested Volt buyers to get on a waiting list or place an order with a local dealer, G.M. is subjecting consumers to a high degree of uncertainty, including price gouging. With demand expected to far outstrip supply for the first couple years, customers have to compete with one another to edge out other potential Volt buyers. As we reported a few times already, this approach gives dealers the opportunity to mark up a Volt by thousands of dollars.

Nissan's Process: Customers are in control.

By contrast, Nissan is taking orders in a centralized coordinated process, and is thereby pitting dealers against one another to earn the business of LEAF buyers. It seems like a fine point, but LEAF intenders control the allocation, determining which dealer processes the order. As a result, the power shifts to LEAF buyers.

How do we know that this is a better process for plug-in car buyers? Because some motivated are already reducing prices by a $1,000 or more to earn loyal customers. Lists of those dealers willing to reduce the price are forming on the web. More such lists are certain to spread to other websites.

Lesson Learned?

There will be many lessons learned along the way to the first million plug-in cars on U.S. roads. We’re in unchartered territory, so mistakes—some of which will hurt customers— are going to happen. The long-term success of a carmaker’s electric vehicle program will be its ability to admit mistakes and adjust accordingly.

New to EVs? Start here

  1. Seven Things To Know About Buying a Plug-In Car
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  2. Incentives for Plug-in Hybrids and Electric Cars
    Take advantage of credits and rebates to reduce EV costs.
  3. Buying Your First Home EV Charger
    You'll want a home charger. Here's how to buy the right one.