Nissan: EVs a viable business model in 2012
Nissan EV-02 - Click above for a high-res image gallery
Despite the sorry state of the global economy, Nissan is investing rather heavily into electric vehicles these days, which is why the Japanese automaker won a $1.6 billion low interest loan under the U.S. Advanced Technology Vehicle Manufacturing program to build batteries and vehicles at its facility in Smyrna, TN.
Nissan's stated goal of mass-producing EVs by 2012 is going to be costly, but the automaker apparently believes building electric cars will finally become part a viable business plan by that time. Andy Palmer, senior vice president and head of product planning at Nissan, had the following to say at at the Reuters Japan Investment Summit:
Normal car development cost is about $300 to $500 million, and EVs are above the upper range of that... We're looking at two stages: initially, at the 2010 launch – that's when we'll get all of the buzz and the aid and all the rest of it. That's why we're talking about mass-marketing in 2012, 2013. That's when it becomes a viable, mass business in our business model.Obviously, the global automotive market is in the midst of a massive shift towards environmentally-friendly technologies, and a great deal of the money that's being invested in that space right now goes towards battery development. Says Palmer:
I guess it's fair to say that if we couldn't access government funds in this environment, we'd have to slow down the development because of the enormity of the investments.
Gallery: Quick Drive: Nissan EV-02 prototype
[Source: Reuters]
Reader Comments (Page 1 of 1)
Throwback 12:22PM (7/10/2009)
"I guess it's fair to say that if we couldn't access government funds in this environment, we'd have to slow down the development because of the enormity of the investments."
In other words, "smart lenders would want to see some results before loaning us a boat load of money." What happens in 3 years if gas is still under $3 bucks a gallon in the US? If that is the case I don't see how these cars will sell in enough quantity to make a profit. Gas prices have been high in Europe and Japan for years and yet no EVs by any major company, Why?
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Radek 10:55AM (7/13/2009)
Proper batteries aren't cheap enough to make faster EV transition yet. Not many people are willing to (or are aware) pay bigger front costs of EV vehicles, even if they save money long term. Most car companies didn't like idea of EV because such cars need very little maintenance (hence lower profits for them selling parts). But it's starting to improve slowly. Tesla really changed perception of what electric car can be.
locoyocal 1:02PM (7/10/2009)
Throwback,
The beauty of the electric car is that it will cost less to build and run, than a normal car no matter what the price of gas is.
Lou Grinzo 4:00PM (7/10/2009)
In other words: "The myopic idiots running the financial institutions, the ones who helped cause the credit crash and almost derailed the entire US economy, weren't bright enough to see the wisdom of lending us money for such an important, and ultimately profitable, venture. This just proves yet again that the primary purpose of government is to do those important things that would not get done otherwise."
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kballs 8:24PM (7/10/2009)
How can they even compare the development costs? The $300-500 million for a "new" car is just tweaks to existing technology and parts... reusing many parts, engines, etc. the biggest cost is chassis design and tooling, basic and reliability testing, crash testing, emissions testing (nix that for EVs), marketing, etc... quite small incremental costs even for a new platform. To say that EVs cost a lot more to develop is misleading because once they develop their generation 1 platforms the cost to develop iterative versions and new models will be incremental and comparable to conventional ICE cars.
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