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Blessing in Disguise: Japan Quake Gives Nissan a Good Excuse for Leaf Delays

The production disruptions caused by the Japanese earthquake and tsunami might be "almost a blessing" for Nissan, which before the disaster was having trouble delivering its Leaf electric cars on its announced schedule, says analyst Sam Jaffe of IDC Energy Insights.

Indeed, Nissan was already lowering 2011 production expectations before the earthquake. It set out to get 20,000 U.S. reservation holders, and was bowled over by how quickly it actually got them. That created a waiting list of people who want their cars now, and felt they're owed a good explanation for why they can't get their hands on keys. The company didn't bring natural disaster down on itself, but the fact of it has certainly quieted the howling mobs.

Jaffe said that if Nissan is losing money on every car sold, as he suspects, it might be better off not cranking them out too quickly. It's still going to deliver vehicles, but maybe the Japanese factory doesn't have to run 24/7.

Leaf production shuts down
This isn't to say that the earthquake hasn't caused major damage, or that Nissan isn't working to get its factories back up. Production of the Leaf electric car and its battery pack reportedly resumed March 24, but now that plant is going back offline. Nissan announced Wednesday that production at the Oppama facility that produces its Leaf will be "suspended" all of next week. Operation levels for all its plants, it said, will "still be limited" because of parts delivery problems.

Nissan is behind schedule, but nobody is pointing fingers right now. The company has a stated goal of selling 25,000 Leafs in the U.S. in 2011 (and 50,000 worldwide). So far, though, it has delivered 5,000 Leafs worldwide, including some to Europe, and 1,500 cars are either in transit or recently arrived by boat in California.

Going slow... even before the earthquake
Nissan, however, had been backing away from the 25,000 figure, or from a commitment to satisfy those 20,000 reservations this year. Nissan's Brian Carolin told The Detroit News in February, before the earthquake, "I think 20,000 will be too high [for 2011]. You just have to make this launch absolutely perfect. It's not a numbers game."

According to Jaffe:

Nissan has clearly been having trouble delivering Leafs at the rate they promised. It's hard to judge on just the first few months, but it was really slow -- they were barely able to get a few cars out the door. And now they have a very good excuse -- an act of God. The earthquake is not a good thing for Nissan, but it has helped their corporate message somewhat.
The earthquake gives the company an unassailable reason to delay delivery of a very in-demand car. As I reported, the shortage is causing some Leaf price gouging, and one Nissan dealer was offered $70,000 for his car. Further delays are sure to aggravate the reservation holders, who will just have to be patient as the Leaf rollout proceeds at its own pace.

But perhaps the Department of Energy should revise its roadmap for a million electric cars by 2015 -- it still shows 25,000 Leafs in 2011.

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Photo: Flickr/Rutger Middendorp
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