Mitsubishi unveils $47,000 electric car

TOKYO - Mitsubishi Motors Corp.'s electric vehicle is twice as expensive as popular hybrid cars by rivals Toyota and Honda, but Japan's No. 4 automaker said Friday the i-MiEV will help it survive increasingly intense global competition.

"With the electric vehicle, we will challenge global players," said Mitsubishi Motors President Osamu Masuko at a news conference. The company unveiled the i-MiEV Friday at its headquarters in Tokyo.

The i-MiEV is powered solely by electricity, and can be recharged from a regular home socket. The four-seater vehicle can run up to 160 kilometres after charging seven hours at 200 volts.

"It is a zero-emission vehicle. It does not rely on oil, which is different from hybrid cars," Masuko said.

The price tag is also different. Mitsubishi's i-MiEV costs 4.59 million yen ($47,560), more than twice as much as Toyota Motor Corp.'s new Prius, which is just over two million yen, or Honda Motor Co.'s Insight, which starts at 1.89 million yen, the cheapest hybrid on the market.

Masuko acknowledged the high price is a major hurdle to encouraging people to buy the i-MiEV.

"This is not the price that ordinary people can easily buy. But as we increase our production, we aim to cut the price below two million yen," he said without elaborating further.

Masuko noted i-MiEV buyers can receive hefty subsidies and pay no tax under a government program promoting the use of ecological vehicles. With the help of government subsidies, the i-MiEV costs 3.209 million yen, down 43 per cent from the original price. The vehicle is also tax-free for three years.

The subsidy program for electric vehicles runs from April to March next year. But an official at the trade ministry said the government plans to extend the program.

The Mitsubishi Motors president said the company had spent more than 40 years to develop the i-MiEV, but declined to say how much the company had invested in its development.

It expects to sell 1,400 units, mostly to local governments and companies for the current business year to March 2010. Sales to individual consumers in Japan will begin in April 2010.

The company aims to sell 250 units abroad, mainly in Britain and other European countries, in the current financial year. Mitsubishi also plans to sell the i-MiEV in China and the United States, but Masuko gave no details.

Globally, Mitsubishi hopes to sell 15,000 units for the year through March 2012.

But the company can only make a profit on the i-MiEV if it produces 30,000 units per year, Masuko said.

"We want to reach that level as early as possible," he said without giving further details.

He stressed that the i-MiEV has the potential for growth, adding that the company is considering making a commercial electric vehicle.

Automakers battered by the global slump are trying to position themselves in this potentially lucrative market for "green" vehicles.

"We are looking ahead. We look at the global auto market of 10 or 20 years later from now," Masuko said. "We are in the midst of global auto competition, and we should not be left behind."

Mitsubishi Motors' share price has jumped recently on hopes for the new car. On Friday, it rose 2.3 per cent to close at 175 yen, after surging almost 12 per cent Thursday.