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Nissan amps up calls for EV subsidies

Help needed: Nissan chief operating officer Toshiyuki Shiga says Nissan is beginning its Leaf EV roll out in countries with incentives.

Australian Nissan chief says lack of local subsidies will hurt EV roll out

Nissan logo15 Jun 2010

By MARTON PETTENDY

NISSAN has intensified its calls for government incentives for electric vehicles, saying the lack support will limit its ability to roll out EVs in Australia.

Speaking at the world’s biggest test drive of pre-production Nissan Leafs in Japan yesterday ahead of the international launch of the all-electric compact car, Nissan Motor Co chief operating officer Toshiyuki Shiga said: “It is difficult to introduce Leaf in every country at the same time.

“Therefore we are starting with countries that promote EVs.” Nissan Australia managing director Dan Thompson said the unwillingness of governments at all levels in Australia to offer subsidies for EV buyers would limit Nissan’s ability to rollout the ground-breaking Leaf EV in significant numbers Down Under.

“The Australian government today has given a big fat zero (in terms of subsidies for EV buyers) and that will limit our ability to rollout EVs in Australia,” said Mr Thompson yesterday in Japan during a week-long test drive of the Leaf by media, government representatives and signed-up Japanese customers ahead of the car’s production in September.

“It’s still no different than 12 months ago. In that time we’ve seen 10 to 15 other counties adopt EV-friendly policies.

“Every other week there’s another government announcing more support for EVs, bu to this day there is no incentive and no target, so Australia is late to the (EV) party.

“The cars won’t hit the road here for some time. We’re looking for consumer-based incentives in the next 12 months. There’s a list of at least 15 different things that could be done, including things like registration costs.

“Each level of government has its own pool of options,” said Mr Thompson, who added that the Victorian government and the City of Sydney had been most proactive when it came to EVs.

12 center imageFrom top: Nissan Australia managing director Dan Thompson, Nissan Leaf, Nissan senior vice-president Andy Palmer, Nissan Leaf chassis.

Nissan continues to speak directly with state governments on EV issues but ceased direct discussions with the federal government when the Federal Chamber of Automotive Industries’ EV committee was established.

Nissan’s vocal stance on local EV incentives is in contrast with Mitsubishi, which earlier this month announced it would be the first car-maker to launch an EV in Australia in August, when the first 40 examples of the all-electric i-MiEV start arriving here.

Mitsubishi says the local success of the i-MiEV, which it admits is suitable only for city driving, is not dependant on government subsidies or fast-charging infrastructure.

Like the i-MiEV, the first 40 customers for which will be hand-picked by Mitsubishi to be ‘ambassadors’ for the pint-sized city-EV, the larger Leaf hatchback is likely to be a lease-only proposition in Australia, but is unlikely to cost as much as the i-MiEV, which will cost a total of about $62,000 to own for three years.

Nissan last month announced that the Leaf would cost less than €30,000 ($A42,855) after incentives in most European countries, while in the US – where pre-orders opened on April 20 – it will cost as little as $US25,280 ($A29,768) after a $7500 federal tax credit.

Nissan says that by the end of next year the Leaf will be on sale in all western European countries, where details of an exclusive Leaf finance offer similar to the one already announced in the US and Japan will be revealed next month.

Mr Thompson said Nissan Australia was at least a year away from deciding its retail strategy for the Leaf, which has been confirmed for release here in 2012, and that (pre-subsidy) overseas prices were a clear guide to the prices Australians should expect to pay.

But he said a lease deal similar to that in the US and Europe was the most likely scenario for the release of the Leaf here.

“When we go out with the pre-sale we’ll say if it’s for lease or purchase, but lease is the preferred option for me.

“It solves some of the hurdles of EVs the best way is an all-inclusive offer through Nissan’s own captive finance arm. We will lease the car, package it all up and remove all the possible rejections to purchase, such as servicing costs and the residual value of the batteries.” Mr Thompson said Nissan Australia would have the advantage of knowing what sales strategy worked in other markets and what didn’t.

“We’ll be in a good position in Australia with a year of data to call on, because this is a 100 per cent new business model. Not until the Leaf rolls out in Japan and the US will we know how it works.

“We can do all the research in the world but it’s really anyone’s guess,” he said.

Mr Thompson said the first examples of the Leaf would arrive in Australia next year for field testing by fleets, government departments and the media, as part of agreements with a number of state governments to test real-world power usage in Australia – regardless of government incentives.

“The lack of Australian subsidies won’t change our position in terms of launching the Leaf, but it will have a negative impact on the allocation we will receive.

“We’re not asking for a permanent incentive – just the encouragement of the uptake of EVs.

“We will be supply constrained so we’re not talking about tens of thousands of EVs, but (sales) volume will be contingent on government incentives.” The local Nissan boss said charging infrastructure was the other crucial requirement for the success of EVs in Australia.

“We’ll launch the Leaf in Australia in 2012, but to take EVs beyond a niche product we’ll need some sort of charging infrastructure that’s appropriate enough to eliminate range anxiety.

“Our focus at the moment is on market readiness and that means charging infrastructure and, equally importantly, government incentives.

“Later on when EVs gain more acceptance in Australia, quick-charging infrastructure will become more important as people want to drive their EVs further,” he said.

The Leaf enters production in September at Nissan’s historic Oppama plant, where annual capacity will eventually increase to 50,000 vehicles, before going on sale in Japan, Portugal, The Netherlands and North America in December – the same month Chevrolet’s vital new Volt plug-in hybrid goes on sale in the US.

The Leaf will hit the United Kingdom and Ireland in February 2011, but Nissan’s global mass marketing campaign – including in Australia – won’t start occur until 2012.

US production will commence during the second half of 2012 at Smyrna, Tennessee, followed by UK production at Nissan’s Sunderland factory by early 2013.

The Leaf’s lithium-ion batteries will be made by Nissan’s joint-venture with NEC, Automotive Energy Supply Company (AESC), which originally planned to produce just 54,000 EV units a year.

“Foreseeing an upward trend in future demand,” says Nissan, AESC will increase Japanese EV battery production to 90,000 units by 2011. Eventually, Portugal will produce 50,000 batteries annually, with the UK contributing 60,000, France making 60,000 and the US building no fewer than 200,000 EV batteries.

Nissan and its alliance partner Renault plan to have the capacity to eventually produce some 500,000 EVs every year from a total of five battery production sites globally. Renault Nissan CEO Carlos Ghosn has controversially forecast that EVs will comprise 10 per cent of the world’s new vehicle fleet by 2020.

Total Leaf production is slated to reach 200,000 vehicles a year once the US and UK plants are in operation, but the small five-seater hatchback is the first in a series of EVs the Renault-Nissan alliance plans to produce, with a ground-breaking ‘e-LCV’ van next on Nissan’s EV agenda.

“So far we are planning to build only 200,000 Leafs,” said Mr Shiga. “Then, after 2012, the second Nissan EV will be a LCV (light commercial vehicle) and the third will be a luxury car.” Nissan’s fourth EV will be based on the four-wheeled motorcycle-like LandGlider concept that debuted at last year’s Tokyo motor show, while Renault also plans to produce at least four distinct EV models.

Each EV will employ different modules of the same laminated lithium-ion battery pack Nissan is already producing with NEC in Japan.

“The Renault-Nissan Alliance is investing over four billion Euros to lead the auto industry in electric vehicles, with eight products across three brands,” said Nissan International senior vice-president for sales and marketing Simon Thomas.

“This investment includes five battery plants and seven confirmed assembly plants, including Sunderland in the UK. This reflects the strong commitment the alliance has made to electric vehicles and our determination to lead the market.” Mr Thompson said he expected the company’s forthcoming commercial EV – likely to be based on Nissan’s new NV200 compact van – to also be sold here.

“Certainly we think there’s demand for an LCV EV in Australia,” he said. “When the time comes in terms of the EV rollout we’ll certainly put our hands up, because most of the fleet companies we’re talking to about the Leaf are even more interested in a commercial EV.” Mr Thompson said quick-charge facilities will be crucial to the viability of the e-LCV in Australia, but admitted such a vehicle would be better suited to sales and delivery specialists driving a set route rather than high-mileage couriers driving in unknown territory.

Despite the ambitious EV model plans, however, Nissan’s main Japanese plant will only have the capacity to produce just 6000 examples of the Leaf in the Japanese company’s current financial year, ending in March 2011. Mitsubishi has doubled its i-MiEV production target from 4000 to 8000 for the same FY2010 period.

Nissan says it has already received orders for almost double that number, with 13,000 US pre-orders and 6000 from Japan combining for a total of 19,000 as of last week.

“Originally we planned to expand Leaf production in 2012,” said Mr Shiga. “So until then we have a supply shortage. From September 2010 we will produce the Leaf and its batteries only in Japan, with volume ramping up throughout 2011.” The Leaf will open for pre-orders in Europe next month, but already the head of Nissan’s EV division Andy Palmer has warned the company will screen the thousands of US customers who have placed a $US99 deposit to ensure the Leaf meets their requirements.

“We'll even be advising some people not to buy,” he told Automotive News last week. “We don't want them to be driving 300 miles a day. It's all about managing expectations. Electric cars aren't for everyone.” However, it seems the Leaf will appeal to owners of Toyota’s hybrid icon, the Prius. According to Nissan’s divisional vice-president Al Castignetti, more than half of the 130,000 hand-raisers that expressed interest in the Leaf so far have been Prius owners.

“That's a pretty significant signal to us," said Mr Castignetti when Nissan North America Inc broke ground at the Tennessee Leaf assembly line and battery factory recently.

“It tells us that there is a segment of eco-friendly consumers who are interested in going to the next level. They own a hybrid vehicle. But if the next step is available, they want to take it." Most US Nissan dealers have been told they must install three charging stations – one in their service area, one in an area where cars are delivered by truck and a third on the property where owners can gain easy recharge access. Large stores will require a fourth charger, while small retailers will have to install just two.

“Nissan leads the industry by being the first auto-maker to offer an affordable zero-emission car,” said Mr Thompson.

“It’s a pure electric vehicle, with no tailpipe emissions and very low running costs. Nissan Leaf may look similar to a compact family car, but its smoothness, acceleration and handling will surprise and impress drivers and passengers alike.” Despite billing the Leaf as a family car, Nissan says that 84 per cent or pre-orders in Japan have come from people aged over 40. At 34 per cent, the largest group was aged over 60, while customers aged in their 40s and 50s both accounted for 25 per cent of depositors.

Mr Shiga conceded that EVs made more sense in nations like Japan, where only 50 per cent of energy is generated by coal-fired power stations, which are employed almost exclusively in Australia.

But he said EVs were a vital step in shoring up the automotive industry’s future after crude oil runs out, as governments attempt to develop more renewable forms of power generation.

The NSW government, for instance, is this week expected to ban the building of coal-fired power stations in the state as part of a new climate change policy expected to go to state cabinet this week.

“The automotive industry is now more than 100 years old and it has grown thanks to oil,” he said. “But current global warming issues mean we have to consider the environment.

“Also, oil is running out – its price will increase as we face a complete shortage of oil. Cars have no future without oil. It won’t happen in 10 years, but we need some sort of solution now.

“EV is environmentally friendly – there’s no doubt about that. It’s also fun to drive, but the two key factors here are the environment and future energy use.”

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