Nissan Will Move a Million Leafs in Six Years, says Ghosn. Don't Bet on It
The Nissan Leaf electric car is sold out. The company stopped taking reservations in September after 20,000 Americans paid a refundable $99 to secure their place in line for the first-year allotment (which is 50,000 worldwide, 20,000 for the U.S.). But that level of interest was expected -- there are a lot of early adopters out there.
The big question is how many sales the company can expect in 2012 and 2013, and about that Nissan CEO Carlos Ghosn is being positively expansive: In Japan Thursday, he predicted that the Leaf would sell a whopping one million units in its first six years, and also pay back the company's more than $5 billion Leaf investment by that time.
Ghosn also said that, by 2020, electric cars would constitute a tenth of global auto sales. Let's just say that's an optimistic projection that I haven't seen matched by any prognosticators, except perhaps for the Electrification Coalition. And EC's numbers -- 75 percent of light-duty miles traveled by 2040 could be electric miles -- came with an asterisk (and note the "could").
CEO Robbie Diamond told me that EC's prediction is dependent on realization of its Roadmap, which calls for a high level of U.S. government spending. A bill calling for an initial $500 million in EV subsidies was to have been addressed in the lame-duck session of Congress, but so far it's languishing as taxes crowd out other issues.
Ghosn recognizes the need for government subsidies. He's the most prominent member of the Electrification Coalition, and he said when it was launched, "The widespread acceptance of zero emission cars will require more than the efforts automakers can provide on their own. Public and private collaboration will be the key to mainstream acceptance." Amen to that, brother.
J.D. Power thinks that 70.9 million cars will be sold worldwide in 2020, and that only 1.3 million of them will be electrics. That's less than two percent. IHS Global Insight, in an analysis of Nissan partner Renault's ambitious electric strategy, wrote, "IHS Automotive at the moment so far sees a slower ramp-up in EV sales than the manufacturer would itself like, with Renault forecast to manufacture a combined total of 80,000 units by 2015. Significantly short of the company's own breakeven point of 100,000 units per annum.
Both Boston Consulting Group and Deutsche Bank have said that pure EVs will reach from at least one to at most five percent North American market penetration by 2020 (depending on what governments and gas prices do). That would still require the sales of at least 200,000 battery electrics by 2020 (a million if the upper figure is reached).
I see a million North American EVs as a stretch goal for 2020, and Ghosn's prediction that the Leaf alone will do that many in six years as wildly hopeful. I'd like to drink some of his magic elixir.
Earlier this week, I offered some thoughts on the "Five EV Myths" described by Mary Ann Wright, a Johnson Controls battery vice president, with some colleagues from Booz and Company. I subsequently interviewed Wright, and she is quite pessimistic that EVs will achieve anything like the penetration Ghosn anticipates.
Wright, who was chief engineer on the Ford Escape Hybrid, thinks that, at least in the short term, hybrids and start-stop "micro-hybrids" will command more of the market than battery EVs. "A lot of people talk about battery EVs as a good second car alternative, but you don't build a mass market on transitioning second and third cars to electric," she told me. "If that's the assumption, then EVs will continue to be a niche, as hybrids are today. Today, EVs with a 100-mile battery are a very expensive proposition."
I'm bullish on EVs. I think they'll sell well, but not spectacularly. We have to keep our feet on the ground here.
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Photo: Jim Motavalli