January 9, 2013 at 10:30 am
Nissan launching production of Leaf in U.S.
By David Shepardson
Washington — Nissan Motor Co. said it will begin U.S. production of its all-electric Leaf on Thursday in Tennessee as part of a $1.4 billion government loan.
The Japanese automaker won an Energy Department loan in 2010 to build a battery plant in Smyrna, Tenn., and to retool to build the Leaf at its assembly plant next door.
The Leaf will be built alongside the company's gasoline-powered products.
Nissan says it is the only automaker that manufactures its own electric vehicle batteries, at the biggest lithium-ion automotive battery plant in the United States.
The Leaf's sales have struggled and the automaker failed to double sales in 2012 as it had predicted and instead sold about the same number as in 2011.
Last year, Nissan sold 9,819 Leaf EVs in the United States — up 1.5 percent over 2011.
The Leaf is not the only struggling electric vehicle. Ford Motor Co. sold just 685 Focus EVs in 2012 — its first full year of sales — even though it has built 1,627, according to a report from Ford last week.
Nissan CEO Carlos Ghosn has previously predicted that 10 percent of all vehicles sold by 2020 worldwide will be electric vehicles.
Nissan and its alliance partner French automaker Renault have invested $5.6 billion in electric vehicles in recent years.
Ghosn told reporters in November 2010 in Washington that the alliance would sell 500,000 EVs a year by the end of 2013. In a video posted in October by the company, the Renault-Nissan alliance now says it is "committed" to sell 1.5 million EVs "cumulatively" by 2016.
General Motors Co. had to scale back its sales forecasts for its plug-in hybrid Chevrolet Volt after it failed to meet expectations in 2011. GM initially planned to sell 45,000 Volts in 2012.
But the Volt had a much stronger year than the Leaf. GM sold 23,641 Volts last year — triple the number it sold in 2011.
GM has offered hefty leasing incentives on the Volt, which has helped boost sales, while Nissan has also been offering incentives on the Leaf.
Nissan says the addition of Leaf production and battery assembly has resulted in the creation of more than 300 U.S. manufacturing jobs — "a number that can increase with demand."
In January 2010, U S. Energy Secretary Steven Chu said the two Nissan projects were "expected to create up to 1,300 American jobs and conserve up to 65.4 million gallons of gasoline per year - an amount equal to six times the oil spilled by the Exxon Valdez in 1989."
The Energy Department said Nissan would be able to build up to 150,000 Leafs annually in Smyrna and produce 200,000 batteries at its government-financed plant.
Nissan says the Leaf assembly requirements are similar to those of its traditional siblings like the Altima and Maxima with which it shares a manufacturing line.
"Adding the electric vehicle to the Smyrna manufacturing environment required a few process changes such as the addition of quality confirmation specifically for electric vehicles and special training for technicians," Nissan says.
Nissan hasn't said how many Leafs it expects to build in the United States this year.
Nissan has acknowledged it made some mistakes in how it marketed the Leaf — and touts the upgrades to the new 2013 model being built in Smyrna.
"The Nissan LEAF has expanded beyond early adopters and is now appealing to a broad spectrum of consumers." said Brian Carolin, Nissan's senior vice president of sales and marketing. "Since we launched the LEAF in 2010, we've learned that people are very attracted to the advanced technology and other amenities, but they are also looking for a more affordable price point."
Last month, Nissan said it would replace some poorly performing batteries in its Leaf and will offer new warranty coverage to address battery issues for 19,000 U.S. owners.
Some Leaf owners in hot-weather climates have complained of poor performance and battery capacity loss in the Leaf's lithium-ion battery.
The new coverage applies to all 2011-2012 Leafs, effective likely this spring, and to the new 2013 models going on sale.
Nissan will offer coverage to protect against capacity loss in U.S. Leaf batteries that fall below nine bars of the maximum 12 bars displayed on the vehicle's battery capacity gauge. It will be good for five years or 60,000 miles.
For owners with batteries that have fallen below nine bars before 60,000 miles, Nissan will repair or replace the battery under warranty with a new or remanufactured battery to restore capacity to a minimum of nine bars.
A vehicle whose battery has nine remaining bars is retaining approximately 70 percent of its original battery capacity.