Nissan Electric Car Chief Explains LEAF Battery Leasing

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Editor’s Note: This is part two of an exclusive sit down I had with Hideaki Watanabe, Nissan’s Division Manager of their Global Zero Emission Business Unit, at last week’s U.S. debut of the LEAF in Los Angeles. Part one is devoted to battery swapping, part three to the quietness and safety of EVs, and part four to the different zero emissions directions of Renault and Nissan within their alliance.

As the Nissan LEAF nears its release to the consumer market, the topic of whether or not the battery will be leased or purchased with the car has come to the forefront. In many ways, Nissan has had an on-again, off-again relationship with the topic—leading to confusion among the media and potential customers about what, exactly, Nissan is planning.

In truth, Nissan hasn’t done the best job of presenting a clear picture of the topic. So I was surprised when, at last week’s U.S. LEAF unveiling, Nissan CEO Carlos Ghosn made the most definitive statement I’d heard on the subject to date: “The battery will not be sold, it will be leased, and the lease will be calculated in such a way that for the average U.S. citizen—which today drives between twelve thousand and fifteen thousand miles per year—the cost of the lease of the battery plus the cost of electricity is lower than the cost of gasoline.”

As expected, many in the media latched on to this statement as the final say on whether or not the LEAF battery will be leased, but based on Nissan’s past experience with this topic, I had a hunch that wasn’t really the full story. So I asked Hideaki Watanabe, Nissan’s Division Manager of their Global Zero Emission Business Unit, to elaborate.

With a wry smile, Mr. Watanabe opened with, “I cannot deny what our CEO said. Let me put it this way: we’re trying to provide various options that will fit various demands depending on which market you’re in. When Mr. Ghosn talks, he’s talking to a global audience. It’s not particularly how it’s going to be done in a given market, although it could be one option.”

“The basic concept is that the vehicle minus battery will be comparable in price to a similar sized vehicle,” he continued. “The monthly battery fee, plus the electricity, will be equivalent to, or less than, what you’re paying for the gasoline. So that’s the whole concept of what [Mr. Ghosn] wanted to introduce, rather than the actual methodology.”

According to Mr. Watanabe, Nissan has had many internal discussions about various battery/car lease/purchase options. One model they’ve been looking seriously at, and think could be very popular with initial LEAF customers, would be leasing the car and the battery together. But even so, he acknowledges that this may not work with all customers. “In some countries they prefer to own things, such as in the U.S. or even in Japan,” he said. “In that case we might have a credit scheme, for example, with residual battery value fixed to keep the costs down. There are various ways to implement the idea globally.”

One interesting point Mr. Watanabe brought up is that, regardless of the lease/purchase option, the Nissan electric car purchasing model benefits people who drive a lot. “If you go into more detail, it depends on customer usage. If a person drives long miles it is more beneficial. But for the people who only drive 5 kilometers a day, 3 days a week, there’s not much benefit to the monthly lease or finance scheme because they didn’t pay gasoline to start with. But the basic concept that we’re trying to accomplish is to make people happy from a total cost of ownership perspective.”

Other Posts in This Series:

Disclaimer: The author’s travel and lodging expenses were paid for by Nissan to attend the Los Angeles unveiling of the LEAF.

Image Credit: Nick Chambers

 

Nick Chambers

Not your traditional car guy.