PARIS – Because lithium-ion battery packs cost so much more than a fuel tank, and electricity costs so much less than gasoline, it isn’t clear to Nissan Motor Co. Ltd. how it should begin selling electric vehicles in California in 2010.

So far, the auto maker has not determined what business case to use, says Brian Johnston, a California-based senior project engineer at Nissan North America Inc. working on battery and fuel cell-powered vehicles.

One option is to sell the cars with an expensive battery and trust people to see that if they drive enough miles on low-priced electricity, they will pay less in the end.

Another option is to sell the car and lease the battery, which would be a way of mixing the price of the battery and the cost of electricity into a per-mile cost of driving.

However, to establish the price of the lease, “you have to know the value at the end of the lease,” says Johnston, and for a new technology such as Li-ion batteries, end value is an educated guess.

For example, General Motors Corp. has had to recall and replace all 9,000 nickle-metal-hydride batteries in its hybrid Saturn Vue and Saturn Aura. The halt in battery production to correct the problem has cost thousands of sales this year.

The idea of swapping out batteries in five minutes at a special service station, which Nissan’s partner Renault SA is developing for an electric-car project in Israel, will be watched closely, says Johnston, but it won’t be part of this first Nissan EV program.

Renault launches its Israeli program, based on a converted Megane, in 2011 and will have a purpose-built electric car for other markets in 2012.

Nissan has said it will introduce a pure-electric vehicle in Japan and California in 2010. Both auto makers are counting on future performance and cost levels of Li-ion batteries from a Nissan-NEC Corp. joint venture.

“We don’t have many details of the car,” says Johnston. “It is a top-down program,” meaning the decision to build and market the car came from CEO Carlos Ghosn.

The value of used Li-ion batteries is a question mark, but Nissan has some ideas. For automotive purposes, the end of battery life is when it only has 80% of its original capacity. For cars designed to travel 100 miles (62 km), that means the battery needs replacement when the range has dropped to 80 miles (129 km).

However, the battery at that point still is useful for jobs such as providing emergency power to a hospital or business, or even a home, in case of a power failure. Batteries lose their potency with the charge-discharge cycles, but a static emergency battery would remain useful for a long time even if it starts at 80%.

The Nissan EV and fuel-cell program have a symbiotic relationship. The cars coming to California will have benefited from Nissan’s experience developing its Xterra FCV, says Akihiro Iiyama, general manager of the fuel-cell laboratory at the Nissan Research Center in Kanagawa, Japan.

Nissan has developed power controllers and electric motors for five or six generations of electric FCVs, and that engineering is mature.

At the same time, sales of future fuel-cell vehicles will be helped by the introduction of battery-powered EVs. “EVs will open the market for the drive feeling” of vehicles driven by electric motors, says Iiyama. “Customers will want the electric motor’s quiet and torque response.”

EVs may not be suitable in cold climates, which rob batteries of their range, but fuel-cell vehicles make heat, he says. Thus, FCVs and EVs will co-exist in the future, with FCVs having a role in cities and for longer drives, while batteries will be used in warmer-climate urban areas.

Nissan projects battery-powered and fuel-cell vehicles, combined, will make up 28% of the automotive market in 2050. Internal combustion engines will retain about a 45% share, with the remainder hybrids and plug-in hybrids.