Nissan's Carlos Tavares on Launching the Leaf and Electrifying the World

Carlos Ghosn, CEO of Nissan, announced at a Los Angeles ceremony marking the start of a 22-city tour for the Leaf battery car that the company would lease the vehicle’s batteries to customers, which is one way of keeping the price down to $25,000 or so. The lithium-ion Leaf, which goes on sale late next year, has a range of 100 miles and recharging at home and at a range of stations that will be set up by the Renault-Nissan Alliance.

The leasing plan was the story that led the news for some journalists, but it’s not the whole story. After hearing Ghosn, I interviewed Nissan’s head of operations in the Americas, Portugal-born Carlos Tavares, and he gave the tale a different spin. Leasing is definitely under consideration, but it may be one of a portfolio of options given to customers.

“It is not exclusive of other options,” he said. “It depends on the market, and it depends on the time period. There are multiple possibilities.” Leaf pricing will be decided within two to three months, Tavares said, and then the company will start taking reservations.

Nissan is ready to lose money on the Leaf, at least initially. “We are prepared to make a profitable business once it reaches a certain level,” Tavares said. We don’t expect to start making a profit immediately, but we certainly see a business case. We are shifting completely from internal combustion, and we can’t expect that electric vehicles will have the same profitability that gas cars have after 100 years of development.”

The Leaf will not have swappable batteries, Tavares said, but the Renault vehicles the company is introducing in Israel will. Swappable batteries are a key component of the grand strategy outlined by Better Place, the Renault-Nissan Alliance’s partner in Israel, for the electric Fluence ZE. “The Leaf could eventually have swappable batteries,” Tavares said. “But we have determined that the car does not need them for the U.S. launch. But it is technically possible, and we are not excluding it as a principle for the Leaf.”

The American market is important for Nissan, and it’s ready for EVs. “Three things converge nicely,” Tavares said. “Americans commute a limited number of miles, there are a lot of families with more than one car, plus there are many garages for charging at night.”

After Los Angeles, Tavares went to Washington, where on Monday Nissan was the most prominent company to sign on to the Electrification Coalition, which is formed from auto partners, utilities, charging companies, and would-be EV fleet buyers. The coalition launched with a manifesto calling for major federal support for electrifying the auto fleet. It included not only making existing tax credits more generous, but also adding a host of new ones (including for installing public charging stations). “The incentives are very important,” Tavares said.

Under the ambitious plan announced in Washington, six to eight metro areas would be chosen for intense EV concentration—50,000 to 100,000 cars each by 2013 (700,000 vehicles total). By 2018, there would be seven million EVs (and 20 to 25 more cities added). Finally, in 2040, 75 percent of all vehicles miles traveled would be either battery electrics or plug-in hybrids. It far exceeds President Obama’s plan—audacious at the time, modest now—of having a million plug-ins on the road by 2015.