U.S. Nissan Chief Unfazed by Prius Woes; Leaf EV Price to Include Battery

NEW YORK – Carlos Tavares, chairman of Nissan North America Inc. does not believe the problems resulting in the recent recall of the Toyota Prius this week have poisoned the well for hybrids and electric vehicles.

“The time is right for electric vehicles,” Tavares tells Ward’s on the sidelines of a press conference here celebrating the end of a 10,000-mile (16,000-km), 3-month tour through the U.S. and Canada to introduce Nissan Motor Co. Ltd.’s Leaf EV. The tour made 63 stops in 24 cities.

In a shift in strategy, Tavares now says the Leaf will be purchased with the battery included for a single monthly payment. The battery will not be leased separately.

Nissan will build the Leaf in its Smyrna, TN, plant that will undergo modification with the help of a $1.4 billion loan from the U.S. Department of Energy.

However, the first Leafs to be sold or leased here will be built at Nissan's plant in Opama, Japan, Tavares says. The factory has an annual capacity of 60,000 units for the U.S., Japan and Europe. Smyrna will begin delivering the Leaf in 2012.

Tavares says the numerous recall problems of archrival Toyota Motor Corp. haven't had much impact on showroom traffic or sales for Nissan. Sales climbed 25.8% in January on a daily rate basis, Ward's data shows. Retail deliveries accounted for most of the increase, although fleet sales were up as well.

Brian Carolin, senior vice president-sales and marketing, says Nissan is not offering any special incentives or promotions targeted at Toyota customers, as have some other auto makers. He speculates Toyota's reduced sales volume may be attributable to their buyers watching (and waiting) for the current quality issues to be resolved.

“It's not a spectacular impact, if at all,” Tavares says. “Toyota customers are very loyal.”

Nissan Leaf EV combined operating cost similar to conventional Honda Civic, Tavares suggests.

Tavares has high hopes for the Leaf in North America, noting EVs are less complicated than conventional cars. “We feel good about electric cars, because they are simpler (mechanically) than conventional cars,” he says.

Consumers will recognize that aspect, Tavares suggests, and welcome an opportunity to drive an EV.

The combined operating cost of the Leaf will be similar to what it costs to lease and drive a Honda Civic, Tavares suggests. “We're confident we're going to make this car affordable.”

However, he is unwilling to forecast how many Leafs will be purchased in the first 12 months after the car becomes available.

Tavares also hedges on the Leaf’s cold-weather range. “Driving range will be impacted by how high you turn the heater on,” he says. “We don't have any precise numbers.” He notes the Leaf can be heated or cooled while connected to the electric grid.

A story published in January by The Blade, a Toledo, OH, daily newspaper, says auto makers are finding EVs lose about 30% of their range in extreme hot and cold climates, citing sources at BMW AG’s Mini and Tesla Motors Inc.

Overall costs for operating a Leaf EV will be considerably lower than for a conventional car at $3 per gallon gasoline. Annual fuel cost at that price would come to $1,500 per year, says Scott E. Becker, Nissan senior vice president-administration and finance.

At peak electricity rates, it would cost $450 annually to “fuel” the Leaf's battery pack, he says. “It could be as low as $150 per year at off-peak utility rates.”

Nissan has a 3-step process for those interested in buying or leasing the Leaf:Hand-raisers can register for more information on Nissan’s U.S. website. To date, 50,000 people have done so and will given first priority to reserve the EV.