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The Honolulu Advertiser
Posted on: Wednesday, March 31, 2010

Nissan's electric Leaf to be priced lower than rivals

By Dan Strumpf and Tom Krisher
Associated Press

Hawaii news photo - The Honolulu Advertiser

Nissan's electric vehicle Leaf will go only 100 miles between charges, a limit that analysts say may hurt sales.

SHIZUO KAMBAYASHI | Associated Press

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NEW YORK Nissan's new electric car will cost just more than $25,000 when it goes on sale in the U.S. in December, aiming to bring gasoline-free technology within reach of mainstream drivers.

The Leaf, a four-door hatchback, will have a base price of $32,780, but it's eligible for a $7,500 federal tax credit for electric vehicles. That will make it cheaper to buy than electric vehicles coming from rivals and may force competitors to cut prices. But the Leaf's limited range of just 100 miles per charge for its lithium-ion battery could be a deal breaker for some motorists.

"We want to make sure the car is affordable, ready for the mass market and has mass appeal," Mark Perry, director of product planning and advanced technology at Nissan North America Inc., said in an interview.

Christopher Richter, an auto analyst at CLSA Asia Pacific Markets in Tokyo, predicted the car will prove popular among "people who want to be green, people who love technology and people who are status-conscious."

The Leaf's relatively low starting price as well as an option to lease the vehicle for $349 a month could touch off a price war among rivals. A spokesman for General Motors Co., which will begin selling its Chevrolet Volt electric car later this year, said it will look at Nissan's pricing before announcing its own closer to its December sales date.

The Volt is widely expected to cost around $35,000 before the $7,500 tax credit. Unlike the Leaf, the Volt is not a pure electric car. Instead it's propelled by electricity stored in a battery for up to 40 miles, at which point a gasoline engine kicks in, giving it hundreds of miles more in range.

Perry said the Leaf's 100-mile range is more than adequate for the distance driven by most Americans in a given day. Still, analysts say the psychological effect of so-called range anxiety might be an obstacle for the Leaf. The Volt's internal combustion engine eases that concern by allowing drivers to continue going long after the electric charge is depleted.

"The Volt ... has a much larger appeal," said Aaron Bragman, an auto industry analyst with IHS Global Insight in Troy, Mich.

It will take about eight hours to recharge a Leaf using a 220-volt electric plug the kind used by most electric clothes dryers. Charging using a standard 110-volt outlet could take twice that. Nissan is giving Leaf customers the option of buying a home charging station at an estimated cost, including installation, of $2,200. That cost can be offset by a 50-percent tax credit up to $2,000.

At average electricity rates, charging the Leaf would cost about $2.80 per charge.

The Volt has a smaller battery than the Leaf and can't go as far on full electric power. But it can be fully recharged in eight hours on a standard 110-volt home outlet. Using a 220-volt outlet, it takes less than four hours.

The Leaf and the Volt will be the first among many electric cars due from mainstream automakers in the coming years. Until now, electric cars like the two-seater Tesla Roadster with a price tag of $100,000 have largely been playthings of the wealthy.

Tax credits for plug-in electric vehicles top out at $7,500. The size of the credit shrinks by automaker after it's sold at least 200,000 vehicles in the U.S. The credit then phases out over a year.