Nissan is in the business of making cars, and sometimes that means taking an upfront loss in order to become a market leader later. Nissan wants the LEAF to be the next Toyota Prius, and to do that they have to start making money on their electric car. CEO Carlos Ghosn revealed to Automotive News that LEAF profitability is “getting there,” though he wouldn’t go into detail.
One study claimed it cost GM as much as $49,000 to build each Chevy Volt, though the truth was that GM was selling them at-cost. Nissan is likely taking a similar bath on each LEAF it sells, though it’s probably nowhere near what the Fiat 500e supposedly loses on each sale.
Ghosn says that Nissan is “getting into positive,” though the development costs have not yet been offset. Worldwide, Nissan has sold over 100,000 LEAF EVs, including more than 60,000 in the U.S. alone. That’s enough to make it the best-selling plug-in car in the world at the moment, though it’s still a long way away from Nissan’s own expectations. The real hindrance to sales is the high cost and short range, two things Nissan hopes to address with the next generation.
The question “Why don’t automakers build electric cars?” is constantly being asked, and the simplest answer is because traditionally, there isn’t enough volume to justify the investment. Tesla overcame that by building a high-margin luxury car that was designed from the get-go as an EV, rather than taking a conventional car and shoehorning an electric drivetrain into it.
The next Nissan LEAF and Chevy Volt will both draw on lessons learned from the first generation, and while neither company is making any money on their plug-in cars, the day when they do turn a profit is the real turning point for the industry.