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EV price war erupts

Plugging away: Nissan’s chief operating officer Toshiyuki Shiga recharges the Leaf electric car in Tokyo last week.

Mitsubishi lowers i-MiEV price as Nissan announces unique Leaf pricing strategy

5 Apr 2010

A PRICE war has erupted between Japan’s two pioneering electric car manufacturers even before Mitsubishi’s i-MiEV and Nissan’s Leaf go on sale here.

While both companies have staged Australian previews of their ground-breaking new electric vehicles in recent weeks, Mitsubishi hopes to be the first mainstream car-maker to release an EV here by launching the i-MiEV ahead of the Leaf, which is due on sale locally in 2012.

As has been widely reported, both brands admit initial EV pricing will be high until increased production volume reduces the cost of their lithium-ion battery packs, which is the major contributor in the i-MiEV’s estimated initial pricetag of up to $70,000.

However, the first evidence of Japan’s promised EV price reductions came earlier than expected on Tuesday (March 30), when Nissan announced an unusual pricing structure for its Corolla-sized Leaf hatchback and Mitsubishi all but matched by revealing a lower price for its five-door i-MiEV micro.

Nissan has set a starting price in Japan of 3.76 million yen ($A43,690) for the Leaf, which opened for domestic orders on April 1 ahead of first deliveries in December.

On the same day Nissan’s chief operating officer Toshiyuki Shiga announced the Leaf price, Mitsubishi revealed the i-MiEV would also become available to the Japanese public on April 1, priced from 3.98 million yen ($A46,259).

Previously, the i-MiEV had been available primarily only to corporate customers in Japan, where it has been priced at around $A55,000 since July 2009.

 center imageLeft: Nissan Leaf. Below: Mitsubishi i-MiEV.

While the 619,000 yen ($A7195) reduction in the manufacturer’s suggested retail price for the i-MiEV doesn’t undercut the Leaf’s newly announced base price, Mitsubishi says individual i-MiEV buyers in Japan will be eligible for a 1.14 million yen ($A13,075) subsidy.

Should the Japanese government’s current green-car subsidy, which effectively subsidies half of the price difference between an equivalent petrol-powered model, continue beyond its financial year ending on March 31, Mitsubishi says the i-MiEV will cost no more than 2.84 million yen ($A33,010) in Japan.

Meantime, Nissan says Japanese Leaf customers will be eligible for a (lower) 770,000 yen government incentive credit, which lowers the retail price of the Leaf to 2.99 million yen ($A34,752), thereby undercutting the i-MiEV by about $A1750.

Nissan says its Leaf will also be exempt from Japan’s car-weight and car-acquisition taxes.

Furthermore, the Leaf will be available to drive away in Japan after a down-payment of just 2.4 million yen ($A27,527), in a unique Nissan Auto Loan purchase plan that includes subsequent payments of 10,000 yen ($A114.72) per month, which includes electricity costs.

Nissan says the Leaf deal, which marks the commencement of the company’s pre-order process in Japan, will put consumers on the road in “the world’s first truly affordable, mass-market, all-electric zero-emission car” before the end of this year.

While Leaf pricing for other markets including Australia – where Nissan once targeted a sub-$30,000 Leaf price – is yet to be revealed, Nissan says its unique Japanese finance arrangement is designed to make the Leaf’s cost of ownership competitive with similarly sized cars.

According to Nissan, during six years of ownership in Japan the all-electric Leaf’s power cost would be 86,000 yen ($A986.56) – compared to 670,000 yen ($7685.99) for an equivalent petrol model (based on a fuel price of 148 yen per litre, or about $1.70/litre).

“While a car in a similar class emits around 10 tons of CO2 (based on 1000km of driving per month) in the course of six years, Nissan Leaf produces zero emissions while driving,” said Nissan’s senior vice-president for sales and marketing in Japan, Takao Katagiri, who explained the Leaf purchase process last week.

“Nissan Leaf is an attractive, affordable EV that will introduce a new way of mobility for our customers.”

While Mitsubishi has doubled its FY2010 i-MiEV production target from 4000 to 8000, Nissan says it aims to sell 6000 examples of the Leaf in Japan in the same period, before the company’s first mass-market EV hits the US, Europe and the rest of the world.

As part of the kick-off for its pre-order program, Nissan last week also announced its Japanese dealers will assist individuals in the installation of home recharging facilities, while all a total of about 2200 Nissan retailers will offer 200-volt charging stations throughout Japan before first Leaf deliveries start in December.

By then, Nissan says 200 of its Japanese dealers will also offer a quick-charge facility, which is claimed to deliver 80 per cent of battery capacity in less than 30 minutes, making at least one quick-charge unit available within a 40km radius throughout Japan.

Finally last week, Nissan also said it is developing a new EV fast-charger that will cost less than half as much as similar units currently available. Apart from being installed at 200 Japanese dealers by the end of 2010, it will eventually also be available to purchase.

In other EV news last week, US president Barrack Obama announced on March 31 that his government had placed fleet orders amounting to 5600 hybrid vehicles – more than double the number of hybrids currently in the US federal fleet – and committed to purchasing the first 100 examples of Chevrolet’s plug-in Volt hybrid when it goes on sale in North America next year.

The US announcement came in the same week General Motors produced its first manufacturing-validation example of the Volt – several months ahead of the vital new model’s North American market launch in November – and in the same week the US NHTSA and EPA officially increased the corporate average fuel economy (CAFÉ) standards for light-duty vehicles by 2016 to 35.5mpg (6.63L/100km).

“The first manufacturing-validation vehicle … came down the assembly line on Monday,” GM vice-chairman Bob Lutz told the Detroit News at the New York Auto Show last week.

“This is eight months before production launch. It shows that the program is in extremely good shape,” he said, before adding that GM will make several hundred more manufacturing-validation Volts before it enters production in November and ahead of the Volt’s release in Australia as a Holden in 20102.

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