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Posted by: Ian Rowley on August 02, 2009
Amid much fanfare, Nissan finally showed off the first of several new electric vehicles this morning at the opening of its new global headquarters in Yokohama. Nissan chief Carlos Ghosn, a longtime skeptic on hybrids, is betting that the Leaf and other EVs, will quickly become mass market hits, and even suggested that fully electric models could account for 10% of all car sales by 2020.
The car looks much like other mass market models. Despite its name, the design doesn’t scream “eco-car” and, unlike some electric vehicles of the past, space inside isn’t compromised. Capable of seating five, Ghosn and three Japanese politicians with connections to Yokohama, including former Prime Minister Junichiro Koizumi, emerged from the “blue earth” colored Leaf with ease after it appeared on the stage.
The grand entrance was followed by a short video featuring an assortment of school-children explaining how good the Leaf is for all our futures. One youngster, presumably of his own free will, even compared the Leaf to an angel coming down to Earth.
Ghosn, though, focused on the practicalities, reiterating Nissan’s plan that the Leaf, which runs a 100 miles on a single charge, excluding the cost of the batteries, will cost no more to buy and run than a traditional gasoline-powered car. Zero-emissions of CO2 and other greenhouse gases, he said, are a bonus. Charging time is seven hours, although a 30-minute quick charge can get batteries back up to 80% of full power.
Key to its success will be bringing down the cost of the batteries, which currently cost around $10,000 per car to make. Sensibly, Nissan plans to lease the batteries to customers rather than try to sell the car at an inflated price. Initially, the carmaker will share the burden by taking advantage of government subsidies and cheap loans to ensure sales are profitable from day one. The challenge will be to get costs down to a sufficient level by the time governments begin scaling back incentives. Mass production should help. Ghosn, once again emphasizing the importance of affordability, said that the cost of leasing the batteries, plus the electricity used to charge them, will be less than what customers spend on gasoline for regular cars.
Even if the economics remain challenging—no other automaker is yet following the mass-market approach of Nissan and its alliance partner Renault—the Leaf is an enjoyable drive. I tried out a version of the car, albeit with a different body, earlier this week on a Nissan test track. The acceleration and handling were impressive and, importantly, it felt steady and secure. In terms of size, the version I drove, which measures 4.4 meters long by 1.7 meters wide, was perfectly comfortable. Indeed, when I then drove a Nissan Tiida (Versa in the U.S.) a few minutes later, I realized I much preferred the EV.
Ghosn once again took aim at hybrids, which he says have failed to become a mass market choice. He pointed out that their global market share is just 2%. To me, that’s slightly disingenuous given that, until recently, only Toyota and Honda were serious about gas-electrics. What’s more, Toyota expects to sell over a million hybrids a year in a year or so, and both Toyota and Honda reckon hybrids will soon account for 10% of their sales. Also, hybrids, unlike EVs, aren’t hindered by short driving ranges, use batteries that cost a fraction of the cost of electric cars and don’t require billions of dollars of public subsidy. Ghosn, though, reckons that the only thing stopping EVs becoming a mass market phenomenon will be automakers’ ability to make them quickly enough. “The problem we have is will we have enough capacity,” he said.
Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.