(c) Bertel Schmitt
Nissan’s second-generation Leaf, launched yesterday with aplomb, appears to be quite well received. There was apprehension among Nissan’s PR cadre that the company would get a public drubbing for equipping the car with a battery only good for 150 miles. But the media definitely got the message that the new Leaf is so equipped to hit a price point. Motortrend even came up with new math: “Why 29,950 is more important to some than 150.” As in dollars, and miles.
Nissan could have easily equipped the new Leaf with a 60-kWh battery that would better Tesla’s Model3, and match the battery of Chevrolet’s Bolt. That it wasn’t done is a triumph of sound business over bragging rights. Nissan wants to “democratize” EVs, as Nissan’s chief marketing officer, Daniele Schillaci, likes to put it. Schillaci wants to sell the Leaf to all people who are in the market for a C-segment sedan, not just to EV converts. As a mass-market maker, Nissan knows the power of price points, and of value for money.
“The price position of the car is extremely competitive,” Schillaci told me today. “On top of that, the car has all the latest mobility features, from the ProPilot to an e-pedal that changes the way we are driving a car.”
In coming to the battery decision, Nissan studied its clientele carefully. The Nissan Leaf remains the world’s most-bought battery-electric vehicle, and the company can draw on the experiences with and of the world’s largest EV buyer pool. “Range is really only one part of the equation,” Schillaci said today. “Once you are above 200 km, the anxiety drops significantly. Any range above that is really not a big issue.”
It would be fairly easy to add more range to an electric vehicle: You simply put more batteries in it. The rest becomes a bit more involved. Batteries are heavy; more of them requires a beefed-up structure to carry the extra load. That structure adds even more weight. Then the EV collides with Sir Isaac Newton’s second law, that acceleration of more mass requires more energy. At some point, the battery would have to spend most of its energy to lug itself around.
That’s why auto engineers strive for a proper balance in an EV, and that’s why Nissan’s R&D Chief Hideyuki Sakamoto explained that “a 40-kWh battery is the best balanced proposition we can provide in the C segment.”
Then, there is the nasty money issue. The battery is by far the costliest part of an EV, more battery, more range, more money. A kilowatt-hour worth of EV battery can be sourced in China for around $150. Nissan’s internal cost at AES is probably higher, that’s why they sold their battery business, and that’s why Nissan will go from build to buy once the deal closes. Hitting the $30K price point was seen as more important than adding costly range.
The price sensitivity of the mass market is aptly illustrated by the fact that Nissan’s outgoing first-generation Leaf enjoyed a surprising pick-up in sales in the past months. “And that without extra incentives,” Nissan’s marketing director Roel de Vries boasted yesterday. When I gave him a curious look, he added, “Well, nothing more than last year.” Offered at very attractive lease deals – in California, monthly Leaf leases can be seen advertised for as low as $49 a month – the outgoing Leaf has become a favorite of people with short commutes.
A few years ago, Carlos Ghosn said there is no range anxiety. Instead, there is an anxiety that there is no place to charge when the range is exhausted. Only enthusiasts want to plan their travels charging station to charging station, a complex undertaking akin to a flight from New York to Paris in a Cessna. People are happy, Nissan research shows, if the car takes them to where they need to go and back without worrying about a charger, and if they can fill their car’s battery overnight.
According to Motortrend, “with a projected EPA driving range of 150 miles, the Leaf easily leaps ahead of the 2017 model’s 107 miles, as well as the ranges of every other EV currently available that’s not a Tesla (the Model 3 is projected to have a range around 225 miles) or Chevrolet (the Bolt EV is rated at 238 miles of range).”
And it does it for $29,950. People with longer trips in mind can wait a few months until a bigger-battery version of the Leaf will become available. Schillaci did not want to disclose details but promised that its “range will be better than 225 miles.” When asked, he added: “EPA.”
Elon Musk said in his alleged Master Plan part 2 that “a lower-cost vehicle than the Model 3 is unlikely to be necessary.” Nissan clearly thinks he is wrong. The company is even working on very low-cost EVs for the Chinese market.
Schillaci told me today that “dealer enthusiasm for the car is over the top.” The enthusiasm is infectious. One member of the Tokyo auto press corps even bet with me that the new Leaf will outsell Japan’s perennial front-runner, Toyota’s Prius. The bet is for 10,000 Japanese yen; names and who took which side remain undisclosed.
