DETROIT (AP) -- Honda is cutting the monthly leasing cost of its tiny Fit electric vehicle by one third as it tries to match other automakers in an increasingly competitive market.
The Japanese automaker is offering to lease the subcompact Fit EV for $259 per month, down $130 from a $389 per month offer made when the car went on sale in July of last year.
The three-year lease requires no money down and comes with unlimited mileage, free routine maintenance, collision coverage and a free 240-volt home charging station, the company said Thursday. The charging station does not include installation.
"Although we feel the Fit EV offers significant product benefits over other electric vehicles, in order to effectively compete in the EV market, we need a more competitive price," Honda spokeswoman Robyn Eagles said in a statement.
The new Fit EV lease price starts June 1 and will apply to existing EV leases, Honda said.
The move comes as more automakers enter the electric vehicle market in the U.S. and cut prices to boost sales. Consumers have been slow to accept the new technology, which lets them bypass gas stations but comes with the worry that the cars can run out of electricity on longer trips.
Earlier this month, General Motors Co. said that it would lease the subcompact Spark EV for $199 per month with $999 due at signing as it goes on sale in California and Oregon. Nissan is offering a $199-per-month lease on its Leaf electric car with $1,999 down. Both the Spark and Leaf leases run for three years but have limits on the number of miles you can drive without added payments.
Automakers generally lose money on electric cars because the technology is so new and the batteries are costly. But they have been subsidizing sales by lowering prices. Chrysler CEO Sergio Marchionne said earlier this year that his company will lose $10,000 on every Fiat 500 electric vehicle it sells.
Sales of electric vehicles are rising but still are only a fraction of overall U.S. sales. Automakers sold just over 12,000 pure-electric vehicles in the U.S. through April, according to Ward's AutoInfoBank and Tesla Motors. That's less than 1 percent of the 4.97 million cars and trucks sold during the same period.
The Fit EV can go 82 miles on a single charge and gets the equivalent of 118 miles per gallon of gasoline.
Through April, Honda has sold or leased only 68 Fit EVs in the U.S. Last year it sold or leased only 93, according to Ward's.
Honda rolled out the Fit EV last summer in California and Oregon. It now has 36 dealers trained to sell and service the cars in more states including New York, New Jersey, Massachusetts, Maryland, Rhode Island and Connecticut. It plans to expand that network to more than 200 by the end of June.
- Automotive Industry
- Consumer Discretionary
- electric vehicle