Last week it surfaced that the Nissan LEAF battery may cost an astoundingly low $375 per kilowatt hour to produce. Given that the battery is the single most expensive piece of equipment on electric cars, getting that cost down as quickly as possible will be key to selling them at reasonable prices.
In a Bloomberg report today, the LEAF’s battery maker, Automotive Energy Supply Corporation (AESC) — which is joint venture between Nissan and NEC — is saying that their targets are “a lot tougher.” Masahiko Otsuka, president of AESC, even went on to give specifics, saying that their target is lower than $370 per kWh for the entire battery pack.
Whether or not that price is what AESC can provide out of the starting gate is another question entirely.
Currently the industry average for battery costs is being quoted anywhere from $1,500 to $600 per kWh of fully assembled battery, depending on what analyst or pundit you ask. So you can see how a price of sub $370 per kWh could be a major advantage this early in the game.
An analyst quoted in the Bloomberg report, Takeshi Miyao, estimates that the LEAF battery will cost about $472 per kWh at launch. It’s not clear how he came to that number, but even that would be a coup for Nissan — pricing the 24 kWh battery of the LEAF at about $11,000. Miyao also goes on to say that all the other components on the car cost about $15,000 together.
Given those numbers, at a sale price of $32,780, if Nissan hopes to remain in the black on the LEAF from the get-go, labor and other indirect costs will need to be around 30% of the total vehicle price. I don’t know what the industry average is, but that doesn’t seem too hard to achieve.