I recently posted that the new Nissan LEAF Will Fail. That’s blasphemy to some in the green community, as I’m saying something negative about an electric car. I truly would like to see everyone driving an electric car. I write a lot about biofuels, not because I think they are a final solution, but because they are practical now and are better than petroleum based gas and diesel. To be truly green, we will all need to be driving electric cars that are charged on renewable energy. Unfortunately for us, it’s going to take a long time for everyone to drive an electric car.
Before everyone is in an electric car, they need to be practical and affordable to everyone. Nissan estimates that the final selling price will be between $30-40k, and the battery will need to be leased for an extra $10k overall. Even at the low end of the target, if the battery were included, $30k is still out of reach for most US consumers. I have no doubt that there are people that want the Nissan LEAF. However, when there is a price difference that’s only a few thousand dollars for a hybrid and a standard gas model, the lower price drives consumers to the gas model. The Honda Accord Hybrid was even discontinued because of lack of sales. The LEAF is essentially the same body style as the Versa hatchback, but it will be at least twice as expensive. (Google Images: Versa Hatchback, LEAF)
While there are consumers that will buy the LEAF for the fact that it is electric alone, the majority will be evaluating based on the overall value. There would be a $20-$30k premium for being electric, which will be too much for the market. Not everyone makes their decision only based on green factors. The decision to buy a hybrid is often based on the payback period, or how long would the gas savings take to cover the premium paid for the hybrid model. The purchasing behavior was observed in 2008 when oil and gas prices spiked to record highs, and hybrid sales soared. When gas prices fell again, the overall economy was worse, but hybrid sales fell off disproportionately compared to gas only models.
The fact that there is a gas alternative of what is essentially the same car to consumers is very bad for the LEAF, especially when it can only travel 100 miles on a charge. If the Nissan LEAF had the range of a Tesla, it would have a better chance. The Versa gets ~32mpg (real world estimate) with a 13.2 gallon tank, or a range of more than 400 miles. If you do the same comparison with the Tesla Roadster’s nearest equivalent, the Lotus Elise, it’s much closer. The Elise gets ~22mpg, with an 11 gallon tank, or around 240 miles. The Tesla’s estimate range is 244 miles, almost exactly the same. In addition, the Tesla is a faster car. There is no loss of range, and there is a performance increase. The LEAF gains neither of those advantages.
In addition to the price compared to the gas alternatives for the same model, market success will also be based on alternatives at the same price. When the Nissan LEAF is released, the Tesla Model S will be around the same final price. I have been in the Model S, and I have also been in a Versa. I doubt the interior of the LEAF will be the same as a current model Versa, but the Model S prototype had a better fit and finish than any Nissan I have been in (I have never been in a GT-R). The Model S is a luxury sports sedan, targetted in the price range of what would realistically be competition. At the same price, the LEAF will essentially just be an economy car that happens to be electric.
Honda made similar mistakes with the Civic Hybrid. They essentially offered a Civic that happened to get better gas mileage, but charged a price premium that was higher than people looking for an economy car could afford. On the other hand, the Toyota Prius was its own car. There was no gas alternative to the Prius, and it a car that people bought because it was a good car. My previous car was a Lexus, and the fit an finish of my wife’s Prius (Nav, Touring, Leather, etc) was very close. The lower packages are not quite as polished, but still very good for the price range. The finish of the newest generation Prius is even closer to that of a Lexus.
A car will only be successful if it is something that people want to drive, unless you use the word “success” very loosely. Many in the green community would have defined the General Motors EV1 a success, merely because it was a functional electric car, the people that owned it loved it, and there was a long waiting list to buy it. However, the EV1 was not something that could be sold to the mass market, and it did not have any EV competition. I do not doubt that the Nissan LEAF will be a better car than the original EV1, but there is now more competition and there will be a better alternative at around the same price.
