Nissan Warns of Leaf Production Delays in Smyrna

FARMINGTON HILLS, MI – The chief of Nissan’s electric-vehicle programs says disaster-recovery efforts by the auto maker in Japan puts its timetable for launching U.S. production of the Leaf electric vehicle in jeopardy.

Hideaki Watanabe, corporate vice president-global zero emissions vehicle business unit at Nissan, also suggests poor communication led to confusion among some customers over when they were scheduled to take delivery of their Leaf.

“The communications with the customers were not as good as expected,” Watanabe says as reports of shipment delays and juggled delivery dates have surfaced in recent days.

The Leaf EV launched last year in seven U.S. states, as well as Japan and Europe.

Customers were asked to pay $99 to reserve a spot for one of the cars, currently built only in earthquake-ravaged Japan. Once their number came up to place an order, they received an estimated delivery date.

But some car buyers reportedly have been asked to reapply to the waiting list, while others complain of waiting weeks longer than originally promised to get their Leaf.

“We’ll have to improve,” Watanabe says, admitting the 22,500 pre-orders in the U.S. came faster than the auto maker expected.

Concerns over quality also have slowed down deliveries, because Nissan does not want a single technological glitch on the all-new car.

Poor communication led to confusion among some U.S. customers over when they were scheduled to take delivery.

“This is a new technology, and we did not want to ramp up (more quickly) just because the market is excited,” Watanabe says. “Quality is our priority.”

He also warns the production launch for the Leaf at the auto maker’s Smyrna, TN, assembly plant could face delays and slow the global rollout. Making the Leaf in Smyrna plays a key role in Nissan’s goal of becoming the world’s top seller of EVs.

Since the March 11 earthquake and tsunami in Japan, the auto maker has focused all its efforts to normalize production in its home country, Watanabe tells Ward’s during a Leaf update with journalists at Nissan’s U.S. technical center here.

“We haven’t fully recovered yet,” he says, adding that the company has dialed back marketing of the car so it does not disappoint enthusiasts hoping to snatch one up soon.

Watanabe says he cannot say how many Leafs might get built this year, promising more information in the coming weeks. “We’re on the right track,” he says.

Smyrna was scheduled to start building the car at the end of 2012, and for now that remains the goal, Watanabe says.

“The earthquake is putting (Smyrna) in a very difficult situation, but we are not giving up yet. Is there potential to delay it? There may be. We’re assessing right now,” and trying to minimize lead times.

“We’re working day and night” to improve the odds of an on-schedule prosecution launch, he adds. “There is a risk, but it is too early to say how much.”

Until then, the auto maker’s Oppama, Japan, plant, which has a 50,000-unit annual capacity, will serve as the sole source of Leaf production.

The auto maker expects to fill between 6,000 and 7,000 Leaf orders in the U.S. by the end of the summer, Nissan says. Before the disaster, the auto maker hoped to fill some 20,000 orders by summer’s end.

Ironically, the earthquake in Japan has heightened interest there in the Leaf, as electricity was restored in some areas more quickly than fuel supplies.

“People envisioning the potential of the EV is increasing,” Watanabe says, while admitting the timing of the quake, just as Nissan was launching an all-new technology into the world, was the worst imaginable for the auto maker.

“Disastrous,” he says. “But considering that terrible situation, the reaction from the market was still positive. That explains why people are not just looking at the short-term, but where they want to go. They want more renewable energy.”

Nissan went so far as to lend 66 Leafs to each of the three most-damaged prefectures for medical and government workers to visit refugee camps with supplies, as their fleets were out of gasoline.

“It was very well-received,” he says of the charitable act.

Watanabe reveals his engineers continue to work on ways the Leaf could return energy to the grid during hours of peak demand and how to make a Leaf owner’s home self-sustaining, using solar power to collect energy and storing it for use later in the EV.

As it stands, no plug-in EV available today can accommodate the so-called “smart grid” technology and return power to the grid or the owner’s home.

But Watanabe says the Leaf’s quick-charger, which costs thousands more dollars than either the standard 110V or upgraded 220V charging units, currently has the right safety engineering to conduct discharging.

“It could be one concept,” he says of the quick-charger. “We may come up with several solutions, but that is one possibility.”

Last week, General Motors said it plans to slash the price of its Chevrolet Volt extended-range EV by $1,000, citing the addition of other option packages for ’12 and broadening the U.S. rollout to all 50 states from 13 today.

Watanabe says market forces will dictate Leaf pricing, which now stickers for $32,780 vs. $40,995 for the Volt. Both cars are eligible for a $7,500 government rebate.

Last year, Nissan thought it would open Leaf sales nationwide in 2012. Watanabe says broader U.S. availability hinges on consumer demand and dealer readiness. “We’re launching one-by-one,” he says.

Nissan has sold 7,554 Leafs globally to date, with about 2,000 units delivered to U.S. customers and 5,000 to car buyers in Japan.

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