Blog Post

Nissan: LEAF, Like Other Electric Cars, Will Lose Money at First

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

So close, yet so far — that’s where Nissan stands when it comes to making a profit on its upcoming LEAF electric sedan. While the automaker has previously described the model as being priced for profitability from the get-go, Nissan now says (h/t GM-Volt) that it expects to initially lose money on the vehicle, at least until it fires up high volume production at a U.S. plant in 2013.

“Over the course of the vehicle life, it is profitable — in year three,” Nissan’s U.S. sales and marketing director Brian Carolin tells the Wall Street Journal. That brings Nissan’s expectations more in line with competitors like General Motors (s GM) which has said it will likely sell the upcoming plug-in Chevy Volt at a loss for at least the first generation.

Mark Perry, director of product planning and strategy for Nissan North America, told us late last month that the automaker would be in the black with its inaugural electric model largely because of years of work developing and investing in battery technology.

The battery generally represents the most expensive part of the electric vehicles slated to roll out during the next five years. According to a Bloomberg interview with Masahiko Otsuka, president of Nissan’s battery-making joint venture with NEC Corp, Automotive Energy Supply Corp., Nissan has the ambitious target of bringing the cost per kilowatt-hour for its battery pack to less than $370 per kilowatt-hour, down from an estimated $472 per kilowatt-hour for its batteries today.

Priced at $32,780 (before incentives), the LEAF could be one of the cheapest highway-capable electric vehicles on the road in coming years, slightly undercutting the retail prices expected for BYD’s e6, Coda Automotive’s Coda sedan, Tesla Motors’ Model S and General Motors’ Chevy Volt (see: 12 Plug-in Cars You Can Drive by 2011 and Electric Sedan Smackdown).

For more research on electric cars see GigaOM Pro (subscription required):

Report: IT Opportunities in Electric Vehicle Management

How EV Battery Startups Can Cross the Valley of Death

Photo courtesy of Nissan

7 Responses to “Nissan: LEAF, Like Other Electric Cars, Will Lose Money at First”

  1. Bob Wallace

    What hurdles would those be?

    Not range. Between the Leaf (100 miles), the e6 (200 miles) and the Volt (about 300 miles, first 40 electric) there’s a range choice for any type of driver.

    Not cost. Getting the initial cost into the mid $20k range (including the federal subsidy) means that by figuring in fuel/oil change/brake repair/maintenance costs EVs and PHEVs become the least expensive alternative.

    Perhaps charging points will be limiting for a while. But not in those areas where the Leaf will be sold as Nissan is installing lots of charge outlets, both ‘overnight’ and ‘rapid charge’ outlets.

  2. I actually read an article on the Leaf rollout on Fortune Magazine a few months back and was really impressed with the way that the CEO saw such an untapped market and the potential impact electric vehicles COULD have. I believe that if electric cars can get a better drive life per charge, it’s going to turn the automotive industry upside down. Good job Nissan and great post!