Nissan Electric Car Chief Explains LEAF Battery Leasing
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.
>> Interested in solar power? See if group discounts are available in your city
>> Don’t forget to: Sign up for our electric car interest list.
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:
- Nissan Global EV Chief: Battery Swapping Likely Won’t Work in U.S.
- Nissan EV Chief Talks About Quietness Versus Safety of Electric Cars
- Is the Renault-Nissan Alliance Going in Two Different Electric Car Directions?
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
You Might Also Like
Depreciation May Hit Electric Cars Harder Than Regular Cars
Electric VW Beetle Sets Off On Trans-Canada Trip
Mercedes, Working With Tesla, Will Launch A-Class Electric Car This Year
Americans Slowly Warm to the Electric Car, Show Willingness to Try New Things
November 19th, 2009 at 8:35 am
The leasing scheme Watanabe does not make a lot of sense. The Leaf is set to provide a max of 100 miles on a charge. Your typical family car will do something closer to 350-400 miles on a tank, which can be refilled in minutes.
How is a Leaf owner going to come even close to the 12-15K miles/year he describes as the basis for their battery lease price?
I would use a Leaf for commuting to work and short trips in the area and might put 8K miles/year on it.
If Nissan implements this pricing scheme in the US, my interest will drop from its present high level to near zero. What a shame.
November 19th, 2009 at 9:00 am
If this car is successful (which I doubt) this will change the concept of the “family car”. I can’t take it on long trips, and people who use their cars to drive for business all day won’t be able to use this. Essentially, the 30% they are talking about won’t even consider this. Until the car manufacturers come up with a way to allow for quick fill ups for alternative fueled vehicles that cost less then our current internal combustion engine cars, then I doubt you’ll be able to sell most people on this sort of vehicle. Sure, it will have a niche market, but I don’t see Nissan breaking even on this project. And as always, when you make things cheaper for people, they will flock to it. Money talks, and BS walks.
November 19th, 2009 at 11:17 am
The car makes no sense. With the battery it costs more than a Chevy volt. I can’t think of a single reason why anyone would choose the Leaf over a Volt. Heck, with the battery the price is close to a Tesla sedan which looks a heck of a lot better and has more range.
November 19th, 2009 at 11:49 am
I give Nissan a lot of credit for working hard to get an electric vehicle in the hands of Americans. I predict that the leasing cost of batteries and the cost of purchasing them will drop dramatically as more electric vehicles appear on our roads. There is billions of dollars going into battery research now days, all aimed at making electric vehicles and hybrids more affordable. In a decade, we will be arguing about which electric vehicles make the most sense instead of whether they compete with gas vehicles.
November 19th, 2009 at 4:29 pm
I agree with Todd. Most people will not be able to drive more then 8000 miles a year with given battery range.
Without battery, electric car should be way cheaper then ICE cars. I guess competition is not started yet.
For long terms future I see three options for electric car to survive.
1. Hydrogen car
2. Zinc-Air batteries
3. Infrastructure like ‘better place’. Which requires standardization between manufacturers
November 23rd, 2009 at 11:59 am
I don’t see how your coming up with 8000 miles. If you drive the Leaf to its single charge maximum and drove that every day, your talking about 36,500 miles a year. And that is far from the theoretical maximum as you can quick charge to 80% in 30 minutes.
Obviously that is not very realistic, as most people don’t drive 100 miles a day! However if you drove this as a commuter car and drove 50 miles a day, 5 days a week, that would be 13,000 miles. Which is EXACTLY the kind of mileage he was talking about.
Why are people so down on having options? Let the market decide, if people like the car, they will buy it! It looks like a great car and the battery technology is continuing to develop. This model will allow Nissan to quickly bring new battery systems to market as well.
Basically they are saying you can buy this car, save money on gas and have a zero source emission car. In many ways this is a better option than the Prius as a second car for some people.