Posted in: Cars,
by Gregg Laskoski on Jan 24, 2013 06:00 AM
It's a dicy proposition to gauge consumer interest in electric vehicles --in January-- especially when gasoline prices today are lower than last year's in a majority of U.S. metro markets.
And eventually, Nissan CEO Carlos Ghosn may regret the decision...
but for now, Nissan is trying to pump some life into the Electric Vehicle market and its own entry, the Leaf, for which one could say sales have been dormant.
Automotive News reports that Ghosn opened his press conference last week at the Detroit auto show with a bombshell: Nissan will cut the base price of the Leaf electric vehicle by $6,400 to $28,800. That's an 18 percent reduction from its current base price of $35,200.
Ghosn says the Leaf will still remain profitable at the new price.
Automotive News reports that after hearing the news during last week's show, General Motors' North America President Mark Reuss predicted it "will certainly have an effect" on the market for EVs and plug-in hybrids.
He noted that GM's Chevrolet Volt plug-in hybrid tripled in U.S. sales last year from the year before, a result helped by lower-priced leasing programs.
"The electric car is not dead," Reuss said.
Jim Lentz, CEO of Toyota Motor Sales U.S.A., urged other automakers to bring down the cost of EVs and plug-in hybrids to make the market more mainstream.
"CAFE is not coming down and the price of gas is not coming down over time," Lentz said. "It's the right play to make."
Making the Leaf more mainstream is precisely Nissan's aggressive gamble.
With a $7,500 federal tax credit for EVs, the 2013 Leaf will now be available starting at $21,300 before shipping. In some cities and states, additional incentives will bring the entry price down to $18,800, Nissan says. Last year, U.S. retailers sold fewer than 10,000 Leafs -- half of what Ghosn had projected.
"We wanted the Leaf to be at the point where Americans transact their cars," says Brendan Jones, Nissan North America's director of Leaf marketing and sales strategy. "We're now at a price point to compete directly with comparable internal combustion engine cars."
How does Nissan cut costs? Automotive News says the most significant step was was moving Leaf production to Smyrna, Tenn., from Japan.
Nissan brought production of two of the car's most expensive components -- the lithium ion battery module and the electric motor -- in-house to plants in Tennessee. The motor will now be made in Nissan's Decherd, Tenn., engine plant, while the battery module comes from a dedicated new plant adjacent to the Smyrna assembly operation.
The Leaf is now assembled on an existing production line, sandwiched between two high-volume cars, the Altima and Maxima. Nissan can merge the Leaf's production costs with those models.
The U.S. team made assembly more efficient. For instance, the onboard charger system and motor have been combined into one module, meaning less handling and faster installation.
Overall, it's an intriguing development. But is it enough to get you to take a serious look at the Nissan Leaf?