Nissan Motor chief executive Carlos Ghosn has said the automaker plans to eventually overcome the high cost of making advanced batteries and make its all electric cars price competitive even without government subsidies.
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Ghosn, speaking to the Wall Street Journal in Beijing, gave a time frame of around three years for the cost-cutting endeavour, though he pointed out that the price of oil will play a large role in determining its success.
“How long do we need government incentives going to the consumer?” Ghosn asked. “We think [such incentives] are necessary for a period of time we estimate to be three years.”
Ghosn said Nissan believes demand for all electric battery cars is likely to keep increasing and that the resulting greater economies of scale in producing batteries will allow Nissan and others to slash costs involved in making electric cars. “Scale is absolutely important,” he said.
Technological improvements are also expected to help cut the cost of producing lithium-ion batteries, high-power motors and other new technologies needed to build electric cars.
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By GlobalDataNissan plans to test-launch its production Leaf EV in China in 2011 by making it available to government agencies and other fleet customers in the city of Wuhan.
Initially, the automaker plans to make the Leaf price-competitive with comparable petrol compact cars around the world by relying on government incentives for private purchases and separating the car’s battery from its purchase price.
Nissan executives have said the company plans to lease the battery to Leaf buyers and charge them a monthly payment that is comparable with the monthly expenditure for petrol to operate a conventional compact car.
Petrol prices are one factor manufacturers of electric cars do not control and one that is likely to make a profound impact on demand for EVs, Ghosn said. However, he said he believes petrol prices will remain high in coming years and keep pushing up demand for green cars.
“The higher the price of oil, the faster” it will be to overcome the high cost of building electric cars because that would spur demand, Ghosn said.
“I am confident that the [business] model is going to work,” he said.
Ghosn expects electric vehicles to account for 10% of overall global vehicles sales by 2020.
As a sign of Nissan’s confidence that demand for all-electric cars is going to take off, Ghosn told the WSJ Nissan is planning to put in global capacity to produce 500,000 battery packs a year in the medium term.
Many of those batteries are going to be used to produce electric cars by Nissan and alliance partner, Renault.
