Smart hopes to jump-start brand by offering cheapest electric car

Mon, 17 Sep 2012

Bloomberg has reported that Daimler is looking at the Smart ForTwo Electric Drive to recharge the division's relevance and brand perception, and part of how the ForTwo ED will do that is by being the first mass-produced and the least expensive German electric car on the market. Some context: Bloomberg says the brand seeks 10,000 annual sales for its electron-powered runabout, which is just 10 percent of Smart global sales. More important than how many ForTwo EDs are sold, however, would be the fact that by beating the BMW i3 and electric Volkswagen e-Up! to market, it would "re-establish the brand's position as an urban mobility pioneer with the first mass-produced electric auto from a German manufacturer."

At least, that's the plan – one that we're inclined to file under "Things That Make You Go Hmmm...." We enjoyed our time in the ForTwo ED; the electric drivetrain was a perfect fit and remedied what is perhaps the principal gripe with the current car (in the U.S., at least) – its less-than-smooth transmission. Nevertheless, even though people open to electric cars and the premiums that electric and range-extended vehicles command, we have a feeling that Smart's pricing will continue to make it tough for the little guy to compete.

A conventional Smart starts at €10,275 ($13,489 U.S.) in Germany, and a conventional VW Up! is €9,850 ($12,931 U.S.). The ForTwo ED has been priced at €18,910 ($24,824 U.S.) plus €65 ($85.33 U.S.) per month for the battery – and we'd be surprised if VW didn't make sure the larger, plusher e-Up! was right there with it. The Renault Zoe – not German, we know – will be slightly more expensive at €20,600 (around $27k), plus a monthly fee for the battery, but the Zoe is a four-door hatchback the size of a Clio. Pricing for this landmass hasn't been announced, but the electric competition generally hits the mid-$30K mark: the four-door, four-seat Mitsubishi i-MiEV sets the low end at $29,625, the Nissan Leaf at $35,200, the BMW i3 is rumored to come in around $35,000, the Fiat 500E is predicted to be right there, too, and that's supposedly after Fiat swallows a hefty loss on each car. Chevrolet sets the high bar with the range-extended Volt at $39,145.

The question is, how much less-expensive would the Smart ForTwo ED need to be to still attract customers if and when the electric city-car competition really gets going? With just one car in its lineup, even the conventional ForTwo can't be priced to both attract the desired number of buyers and provide a decent profit margin. In spite of eyebrow-raising analyst commentary in the Bloomberg piece like, "The potential demand for the e-Smart is huge, because people have been brainwashed toward electric vehicles for the last couple of years," we wonder if the Smart ForTwo ED is really the car to take advantage of that "brainwashing" over the long term, or if the only thing it really has going for it, for now at least, is that head start.

By Jonathon Ramsey