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Nissan to Extend Electric Car Leadership With 135-Mile Leaf

Stocks in this article: NSANY GM

All other things equal, every automaker will be delivering more battery range for less money every few years going forward. Not only will Nissan have a 135-mile electric car, but at some point it will also have a 200-mile electric car and probably also 250- and 300-mile electric cars. It's all a natural evolution with technology, in this case battery technology.

But that's not the issue here.

The issue is: When?

General Douglas MacArthur used to say that behind every lost battle there are two words: Too late. Would it matter if Nissan launched the 135 mile Leaf in 2014, 2015 or 2016?

Absolutely! Launching in 2014 compared to 2015 compared to 2016 would make all the difference in the world. The industry has widely pointed to 200-mile electric cars being available in 2016 or 2017.

For example, in an interview with Bloomberg BusinessWeek last December 12, GM's CEO talked about its 200-mile electric car for 2016.

More recently, Audi's CTO confirmed that it will be producing a 200-mile electric car soon, with any reasonable interpretation of that meaning some time before 2018.

In other words, for Nissan to launch a 135-mile Leaf in 2016 would not count as remarkable or even competitive. It would be better than today's car but nevertheless miss its relevant competitive mark. GM, Audi and probably several others would crush that proposition sometime in 2016 or 2017.

However, launching the same car in 2014 or even early 2015 would be entirely different. Right now, the leading competitors in the relevant price range come from GM, Ford (F), BMW and soon also VW. Those all tend to be electric cars priced in the $28,000 to $43,000 range, and they have approximately same 84-mile range as the current Nissan Leaf.

So therefore, timing is everything: Deliver the 135-mile Leaf in the next 12 months and Nissan extends its EV market leadership. Deliver the car later and this advantage starts to disappear.

So what about the timing? Why do I believe Nissan will deliver the enhanced 135-mile Leaf already in the next five to 11 months as opposed to the next one to three years?

It is a combination of at least three things:

1. Nissan has been talking about delivering this kind of enhanced battery since at least 2009

At the time, in 2009, the market for longer-range electric cars was essentially zero and not the highest priority. This obviously changed in 2012, and one can assume that Nissan has pulled in the ability to deliver on the longer range from 2015 to late 2014. As such, it should be possible to enter production in August-September 2014 and start delivering cars by September-October 2014.

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