Nissan LEAF Arriving in 2012 With Affordable Price Tag

Nissan LEAF Arriving in 2012 With Affordable Price Tag

If you were at Westfield Bondi Junction anytime this week, you may have seen a sky blue car sitting in centre court, right next to Borders. That blue car? It’s called the LEAF, and it’s Nissan’s new zero emission, electric vehicle prototype that’s about to become a reality in Australia.

I sat down with Nissan’s team this week to discuss their delivery of what they describe as “the world’s first competitively priced, mass-produced electric vehicle”. The LEAF is a five-seater hatchback, reminiscent in size and shape to the moderately successful Tiida, runs on a 200kg lithium-ion battery that sits under the seats, and puts out 80kW of engine power and 290Nm of torque to deliver speeds of up to 140km/h – and all with no tailpipe emissions.

Japan, the States and selected European markets will get the LEAF first in late 2010, with
Australian deliveries expected to begin in 2012.

Below is an edited transcript of my interview with Kazuhiro Doi, GM of Nissan’s Technology Marketing and Planning and Advanced Engineering, and Michael Hayes, Regional EV Manager Australia and New Zealand.

What has been the biggest challenge in the LEAF’s development?
Doi: The biggest challenge is, of course, the cost. Especially the cost of the battery. But the performance of the EV is not only dependent on the battery itself – how we control the battery is key. For example, one difficulty stems from deterioration of the battery. In the case of the LEAF, after 10 years, battery capacity will decrease 20 or 30 per cent. If we don’t know how to control the battery, it’s gonna be worse. Now we are trying to reduce the cost through volume.

How does the LEAF compare with other EVS like the Mitsubishi i-MiEV or Subaru Stella? Do you see them as competitors?
Doi: No. Their markets are different, because they are small cars and very expensive. We are compact but big enough for five people, so the customer base is different. Nissan’s biggest advantage is the volume of the vehicle. We aim to sell a lot of EVs so the LEAF price will be competitive. I’ve yet to see this kind of competitive price in the EV market. Now I can say that we have no competitors. But soon, many companies will join this competition, like Toyota and Honda. Korean makers are also potential competitors because Korea has very strong electronics companies like LG or Samsung. LG is also making lithium-ion batteries, so they can supply the battery to the Korean makers, but so far no Korean makers seem to have an interest in the EV. I don’t know why, I don’t know when, but they are potential competitors.

What sort of price can we expect to see on the LEAF?
Doi: We’re aiming for a total cost of ownership equivalent to the Tiida in Australia. Of course, the EV has extra value. Even if we can realise a total cost of ownership similar to a petrol vehicle, the initial cost is still higher for the customer.

Hayes: That’s why we definitely need some incentives from the government. Some of them will be financial, some of them non-financial. In the US, for example, you get to use the express lane on freeways. We’re lobbying with governments that the consumer shouldn’t have to bear that cost on their own. We’re currently working with governments at state levels and federal levels to provide incentives for Australia.

What does the mechanical upkeep involve compared to a conventional car? How is it serviced and how much does it cost?
Doi: There is less “water stuff” in the EV. Petrol engines require coolants to cool the engine, and
EVs require much less oil. In that sense, EV is more close to maintenance-free. But still, EVs use a similar type of brakes and other mechanical parts like the steering wheel or the suspension. So the customer still needs to do an inspection at the dealers. But if we make the electronics parts well, the chance of breaking down is less than gasoline cars. Dealers will need special training. From the viewpoint of the safety of the people who work at the dealers, they have to know about high voltage, because EVs use very, very high voltage.

Hayes: Vehicle technicians will have to do additional training specific to an EV, then they would undergo vehicle specific training which would be done by the manufacturer, just like we currently do training for Tiida and Maxima and Murano as well. There would certainly be an additional requirement to have certification on electric vehicles.

How does the LEAF perform at freeway speeds?
Doi: On the highway, I think it’s similar to a conventional petrol vehicle. It’s very, very quiet, much more quiet than a luxury vehicle because there is no engine. Also on the highway, most of the noise comes from the wind. In the case of the LEAF, we are trying to control the air flow to avoid the wind hitting the door mirror. That means from low speed to high speed, the LEAF is definitely quiet. In terms of driving performance, it’s equivalent to a similar-sized vehicle, at least not less.

How many do you expect to sell in Australia?
Hayes: Lots. Everything we can get! We’re working through the business plan at the moment. Obviously it’s slightly different inasmuch as the electric vehicle market doesn’t exist per se in Australia, there’s a lot of work we have to do over and above what we usually do, so we’re working through that at the moment. Our goal is to treat this vehicle as a mass market vehicle, not a niche vehicle, we’re not really trying to sell 50 cars a year, we want to be considerably more than that. Our ability to do that will depend to a certain extent on governments coming and helping in reducing the total ownership cost of the vehicle. Running costs will be reduced because electricity is cheaper per kilometre than petrol, maintenance costs we believe will be reduced also because there’s less placement parts for every service – there’s no oil, air filters, spark plugs, so again those things aren’t going to landfill anywhere. They just don’t get replaced. But there’s a high upfront cost, so we’re looking particularly towards state and federal governments to assist consumers getting into those vehicles. If we can do that and make the buy-in price closer and ownership cost in parity to a petrol vehicle, then we’ll be able to sell a good deal more. Without a high level of government involvement in that, perhaps we’ll sell less because the upfront cost is more expensive. Demand for this vehicle is going to be very high, globally, and we’ll be sending vehicle to countries where the support mechanisms are well established, so that might mean I get less cars if the government incentives aren’t on parity with the other nations, or I might get a lot more cars if Australia is doing the same as US, Europe and Japan. Our goal is to make it a mass-market car.

Doi: The number of sales will be limited by the production capacity. We will start from 50,000 units globally.

Hayes: Certainly battery and vehicle capacity will be limited in the first 12-18 months, but once the US comes online and starts generating 150,000 cars a year, that’s going to broaden the availability, but still there’ll be a ramp-up period. Australia intended start of sales is 2012 which coincides roughly with when the US factory will start to come online, so very soon after our initial start of sales period, the US production will move to the US and that will free up more production.

Are you confident that you’ll get the government support you need?
Hayes: We’ve been dealing with the Victorian and NSW governments closely for almost a year now, governments do tend to take their time in making sure they’ve got everything just so before they make any announcements. But certainly, we haven’t received a blanket no, so we take that as an encouraging sign that there’s a lot of work happening behind the scenes at government level. Certainly we are very hopeful that we’ll get the level of incentive from Australian and state governments.

Can you be a bit more specific about these incentives?
Hayes: When a vehicle comes to Australia, it pays 5 per cent import duty. When a car is sold at dealership there’s 10 per cent GST and 3 per cent stamp duty that’s levied by the state government. Then there’s a $500-$600 registration fee every year that’s also levied by the state government. So you start to add those numbers up, depending on the initial import price of your car, you’re anywhere between $6000-$10,000 worth of federal and state taxes. What we would put to the government is “feebate” during the early adoption phase: give back via subsidy part of or all of those taxes that you’ve taken out of the vehicle. We’re not talking about thousands and thousands of vehicles, we would estimate that from 2012 probably for the first five years, there’ll be about 5000 fully battery EVs – maximum – coming into Australia. We believe by 2018/2020, there won’t be a requirement for subsidies to assist the vehicle; any subsidies that continue on from that time will be supporting government objectives and government agenda items.

Recharging stations are obviously critical to the success of the LEAF. What are your plans for deployment of those once the vehicle arrives?
Hayes: There are three infrastructure companies already established in Australia, Better Place, ChargePoint and ECOtality. Their whole business model is to basically supply all of that infrastructure. That can stretch from the home to the workplace to Westfield to street corners. They’re going to invest in that, but that’s going to be their profit. So they’re setting up their business to be sustainable all the way through to 2070, 2080 and beyond because as vehicles move towards this, they’re going to be the new versions of petrol stations – they’re the energy suppliers now. We’re a car company first and foremost, we’re not really interested in becoming an infrastructure supply company. Somebody else has expertise in that and we’ll let them do that. We’re going to make the batteries and the cars, but we will obviously work with them to ensure that the networking system setup is appropriate for the vehicles that are coming and also for the market that we’re in. And those discussions are happening now on a weekly basis, because we all need to work together to make the whole thing sustainable going forward. And there really is a lot of people working on this, it’s just not out there in the open.

How much electricity does it use?
Hayes: If you were to get in a car that uses 7L/100km, which is pretty much a standard small hatch, at $1.50 – we’re talking 2012 prices – that would cost you 11c/km to drive. An EV would cost you 2-3c/km in energy costs. That’s charging off peak but paying a premium for green energy. The premium’s about 4.9-5.5c/kW-hour depending on which retailer you use, but off peak electricity rates which are about 9c or 10c, so 15c per kW-hour you’re using about 2c per km to drive. Add 50 per cent to cover the possible emission trading scheme, and it’s 3c. So basically it’s less than a quarter of the cost per kilometre in energy.

Why do you think the LEAF will appeal to Australians?
Doi: Nowadays, global warming, or CO2, is common interest for the customer. LEAF is also interesting to drive. We are the makers of the Nissan GTR – we never make a boring car. Our engineering team is focusing on an electric vehicle, but their DNA is “fun to drive”. The acceleration of the LEAF is almost the same as that of a 3.7L petrol car. The handling is also very interesting. In the case of the gasoline car, the heaviest stuff is the engine, and usually, the engine is at the front of the vehicle. In the case of the LEAF, the heaviest part is the battery which is in the middle of the vehicle. The handling feels very close to a sports car, and the centre of gravity is very low. Such motion makes the drivers feel more stable, and it’s more fun to drive.