Leaf Faces Hurdles, Not Roadblocks, Nissan Exec Says

NEW YORK – A Nissan executive acknowledges its Leaf  battery-electric vehicle is not meeting sales goals, but the auto maker stands behind its target of 20,000 U.S. EV deliveries annually, hoping to achieve the feat next year.

Andy Palmer, executive vice president-product planning, admits EVs hit a bump in road this year, but Nissan has no plans to pull back on its drive to make the zero-emissions vehicles a viable business proposition.

Leaf sales have fallen well short of the 20,000 mark this year, with 5,212 sold through September, 27.6% below like-2011, WardsAuto data shows.

“We're leaning on everyone (in the company) to try to maintain that projection,” Palmer tells a press roundtable here. He notes that Nissan recently promoted Billy Hayes to a global marketing position with the task of improving Leaf sales.

“But whether or not we hit 20,000 is for us pretty irrelevant,” Palmer says. “It's important to further sales of electric vehicles with the other (electric) models we have coming.” Nissan premiered a concept Infiniti EV sedan last spring at the New York auto show.

The Infiniti EV will share the Leaf's fundamental architecture, and Palmer says the production model will have almost the same surface as the show car revealed last spring.

Its performance will be similar to that of the Leaf, but one major difference will be its wireless fast-charging system.

Nissan believes the $5 billion invested in EV technology by it and alliance partner  Renault will be recouped by the time the first generation of EVs is phased out, Palmer says. Profitability currently is being hindered by the strong yen. But he forecasts sales will keep rising and that by 2016, the two brands will have 1.5 million EVs on the road.

Part of this will be helped when Nissan's Smyrna, TN, plant starts Leaf production next year. Capacity will be 150,000 units annually. Also coming onstream is a companion battery-pack plant capable of building 200,000 units a year.

Nissan has sold 40,000 Leafs globally since sales launched in late 2010. In Norway, where the government strongly promotes EVs, the Leaf ranks 15^th in sales.

Palmer promises the ’13 Leaf will contain “small improvements.” These won't include new batteries, however; the EV will continue to be powered by batteries produced by a joint venture between Nissan and NEC.

Reports in Japan indicated Nissan would switch to Hitachi batteries to reduce overheating. Palmer says the auto maker has no plans to add a new cooling system to the coming Leaf battery packs.

Palmer admits Nissan has repurchased some Leaf models sold in the Phoenix area from customers complaining of fast-degrading battery packs. The auto maker also now is facing a class-action lawsuit in California over allegations it misrepresented the Leaf’s range. Nissan says the suit lacks merit.

Despite these issues, he claims the Leaf scores 95% in customer-satisfaction ratings, the highest-rated model in the auto maker’s product portfolio.

The Nissan executive confesses Japan's No.2 auto maker has fallen short in promoting the Leaf in the “digital forum” consisting of potential early adopters who have not been persuaded to become buyers of the EV.

There also are shortcomings in Nissan showrooms. One reason is that it takes six times longer for a salesperson to close a deal on an EV than it does for a gasoline- fueled vehicle. Meeting sales targets pushes sales personnel to take the path of least resistance to get customers to drive out with a new vehicle.

“Hopefully, we're going to rectify that,” Palmer says, noting Nissan is looking for new ways to incentivize dealers to sell the Leaf. The auto maker also wants to boost fleet sales of the EV.

“It's a global problem, not just in the U.S.,” he says of  Leaf volumes. “We have to learn how to sell them.”

That doesn't mean Nissan thinks EVs are right for every customer. Palmer explains that only 34% of U.S. motorists drive fewer than 62 miles (100 km) a day. As the Leaf can travel only 90 miles (145 km) before needing a recharge, other drivers clearly should avoid EVs, he says.

Palmer says Nissan in 2015 will launch an all-new plug-in hybrid not in production today. But he forecasts only 10% of the auto maker’s product portfolio will be electric in coming years.

“We try to make it clear what EV limitations are,” he says. “We try to ask customers the right kind of questions. But it's hard to tell a salesman not to sell a car.”

Nissan is starting to see an improvement in Leaf sales, Palmer says. He notes that government regulations in the U.S. and Europe will require auto makers to offer a significant portion of their products with electrification.

“We're still very bullish on electric vehicles,” he says. “We have to sell them at a price point that's only achievable with mass sales.”

Palmer maintains the Leaf is vital to Nissan's mission to be a leader in zero-emissions vehicles. “Our corporate vision is to enrich lives. We just don't follow Toyota anymore.”