Nissan Fears Electric Car Pricing

Nissan just unveiled its much-ballyhooed electric car, which now has a name: “Leaf.” So Nissan is turning over a new, um … something with this vehicle. CEO Carlos Ghosn has been lying low while other global auto-industry execs—Sergio Marchionne of Fiat, Wendelin Wiedeking (formerly) of Porsche—have taken over the limelight. But Mister Shift is back, and he’s showing us his zero-emissions baby.

Of course, he’s staying mum on price—as is seemingly everyone else in the EV game, except for Tesla, and that’s only because we know that the company’s Roadster costs more than $100,000, thanks to the fact the people have actually bought it. However, we do know that the Leaf’s advanced battery—good for 100 miles on a charge—costs $10,000 on its own. Nissan plans to lease customers the battery, produced in partnership with NEC, when the Leaf goes on sale in late 2010. According to the New York Times, other EVs will follow.

My periodic debate partner, Jim Motavalli at the New York Times’ Wheels blog, reports that the Leaf will fall somewhere between the Nissan Sentra and the Nissan Altima in size. Price-wise, that probably means the sticker will be something like $25,000-$30,000, assuming that the EV technology will add to the cost. Obviously, if you take the very expensive battery out of the equation, you have an EV competitor for the Toyota Prius (about $25,000) and Honda Insight (about $20,000) hybrids, as well as a car that undercuts the forthcoming Chevy Volt extended-range EV (the Volt has an electric motor, but also a small gas engine that can “extend” the car’s range when the battery’s 40-mile initial charge is exhausted). Volt pricing is supposed to be between $30,000-$40,000.

However, all the major players who are coming into the EV market over the next few years are being cagey about final pricing. There are two reasons for this: First, if gas prices are relatively high in 2010 and 2011—say, about $4 a gallon or more—EVs will be more appealing to consumers. But they’ll also be competing with established gas-electric hybrids. The last thing the manufacturers want to do is overprice their new EVs and then have to adjust later. But they don’t want needlessly underprice, either.

The other reason is that the manufacturers don’t want to lose out on the opportunity to be the “firstest with the mostest.” So if Nissan says that they’ll be selling the Leaf for $30,000 plus a battery lease, and then General Motors (MTLQQ) drops the Volt to under $30,000, Nissan could find itself with the EV equivalent of a Betamax to GM’s VHS.

Obviously, this could lead to an electric-car price war, with everyone in the game losing money for years as they try to carve out market share. For his part, Carlos Ghosn does seem to be hedging his bets slightly. He only sees EVs representing 10 percent of the overall auto market by 2020.