Nissan Turns Up the Heat in the Electric Car Race

NEW YORK (TheStreet) -- I had an opportunity to speak with Nissan (NSANY) executives at the New York Auto Show and I came away with what I believe are some important updates and nuances on Nissan's electric car plans.

That's important because Nissan claims to have 47% of the world's electric car market today, with over 110,000 sold to date.

As background, I wrote back on March 27 on the subject of the upcoming estimated 135-mile range Nissan Leaf. I also expanded on my views of the electric car market, in terms of cars priced below $70,000 and available before 2017.

So what did I find out that I think is new, important and incremental to the Nissan electric car story?

1. Rapid battery improvement.

As of 2010, Nissan thought it would be updating its battery technology in existing cars -- practically speaking, the Leaf for now -- once every three to four years. It now says that it will be updating its battery technology once a year.

This is consistent with my article from March 27: Nissan has a battery improvement for the Leaf in store later this year. Nissan did not say precisely how the battery will be improved this time, or by how much capacity -- and therefore range -- would be improved.

Nissan did say that once every few years we should expect a step function in battery improvement that would be a lot more than the single-digit percentage incremental version. Thus far the improvements to the Leaf battery have been in the single digits each time.

From this I draw the conclusion that my recent prediction of an estimated 135-mile Nissan Leaf to arrive by year-end 2014 is looking as realistic as ever!

2. View on scale economics.

Nissan said it intends to continue to be the volume leader in electric cars for as far as the eye can see. No other company will be able to build factories large enough to match it in scale for building EVs. As a result, it will be the people's car for EVs as it can deliver a lot better value for the mass market under $30,000 per car -- as well as scale up for more expensive cars.

3. View on battery size.

On this point, Nissan was somewhat contradictory, in my view. Nissan said it believes people are fine with an 84-mile electric car. Why? Because it says it knows people aren't driving nearly as far as 84 miles most of the time.

In my view, this is total nonsense. Of course people aren't driving more than 84 miles -- or some such number -- in a Nissan Leaf. They can't! It's like telling a starving person in Africa they have no need for an American diet because to date they have been observed to only eat 500 calories per day.

People are afraid of taking their Nissan Leaf on some trips because they don't think they will make it. Why? Who knows? Perhaps they are not sure that the charger at their destination will be available or not. Perhaps it's broken! Perhaps they are not sure what may come up in terms of additional stops or detours as the day or evening rolls along, unpredictably.

In any case, the fact that Nissan Leaf drivers almost always drive fewer than 84 miles per trip means nothing as to their need or want to have a car that can go longer. Every single Nissan Leaf driver I know -- and I know many of them -- have one complaint with their car, and one only: Please give us a version that has 150 or 200 miles of range. Or 250. That's what they want. It's the only thing they want to improve their Leaf. The need for much longer range is total and uniform, not the other way around.

Otherwise, if the EV can't handle 150, 200, 250 miles, they can't get rid of their other (gasoline or diesel) car, and they can't be sufficiently happy in their Leaf. I don't see why this is so hard to understand.

I heard a similar argument recently, too, from another major automaker, which shall remain unnamed for the moment. Their idea is that 99% of the time you don't need to go more than 80 to -100 miles of whatever, and that therefore a car that can go 80 to 100 miles will be enough.

Well, if 99% were somehow good enough, why do I wear a seat belt? Why do I buy insurance? Why do I bother locking my door? 99% of the time I'm not in a car accident or get sick or am a victim of burglary.

99% is simply not good enough. If the ambition is to have EVs take over a material percentage of the auto market, the manufacturers need to realize that delivering cars with less than 150-250 miles of range will simply not be enough for the real needs -- 99.99999%, not 99%, of regular people. It's never about the first 99%. It's always about that last fraction of 1%.

However, there is good news, at least as far as Nissan is concerned! Nissan did say that despite its belief that people really don't need cars that can go more than 84 or 100 or whatever, miles -- it will still make them in the future. It intends to turn up the dial on the range front dramatically. All of this is consistent with my article on the 135-mile Nissan Leaf.

One now simply wishes Nissan will take its real and potential Leaf customers seriously and make 150-, 200- and 250-mile versions of the Leaf or other future Nissan EVs. If the customer surveys say longer electric range is not needed, something is seriously wrong with the surveys and they people conducting them should be fired, in my view.

4. There may be an extreme electric Nissan sports car.

Nissan has done a lot of work on preparing an extreme electric sports car but has not taken the final decision to produce it. Such a decision could be made very soon. Once a decision is made it would take two years to conduct durability testing and plan for production. All the basic R&D and concept designs are done.

This would be an extreme car in the same sense as the 1997-2002 Plymouth Prowler: It wouldn't be anywhere near the most expensive or the fastest car in the market but it would be the most extreme-looking imaginable. A true Batman car. And it would be all-electric.

If signoff happens very soon, the car could be in production very late 2016; otherwise, later. If this extreme Nissan electric sports car does become reality, it would be a major halo car. It would be very light, very agile and all-electric.

5. Nissan will make a plug-in hybrid car.

Until now, Nissan has not made a plug-in hybrid car. Most other major auto companies including General Motors (GM), Ford (F), Mercedes, BMW, VW, Toyota (TM), Honda (HMC) and Volvo already have some form of plug-in hybrid car in the market today, in many cases with additional models already announced and entering production soon.

There are many types of plug-in hybrids, with varying sizes for the battery, electric motor, gasoline engine, gasoline tank, transmission and other architectural layouts. Nissan's plug-in hybrid will not be a strict range-extender as in the BMW i3.

Instead, it will be somewhere along the architectural spectrum between the Chevrolet Volt/Cadillac ELR and the plug-in hybrids from the VW Group, Ford, Toyota, Mercedes and Volvo. This would mean a gross/total battery size somewhere between 8 and 16 kWh, and a three- or four-cylinder gasoline engine.

I don't know in which Nissan body such a plug-in hybrid will be made available, but it would be announced no later than March 2016 (likely earlier) and be in production no later than some time in 2016, perhaps as early as late 2015.

Nissan said that while it continues to believe that the right solution is a pure electric car, it also recognizes that its pure EV technology is plenty extendible to the plug-in hybrid market. It makes a lot of sense to capitalize on this, as in the real world there is likely to be good demand for plug-in hybrids while we await lower battery costs and a far more robust EV infrastructure.

As it stands, there are too few electric car chargers, and those that exist tend to be busy when you need to use them given that there are far more electric cars in the market than there are chargers available in public parking garages and office parking lots.

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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