LOS ANGELES--Nissan Motor will keep the price of its upcoming battery-powered Leaf competitive with similar-sizeand expects to make money on the vehicle despite the cost of its launch, said Chief Executive Carlos Ghosn on Friday.
The five-passenger hatchback, which is being designed to have an all-electric range of 100 miles, would cost only 1 percent to 2 percent more than traditional combustion engine vehicles in its class, he said.
"On the pricing of the vehicle it is too early to say, but there will be no surprise," Ghosn said. "We know it will be the key to the mass market."
Nissan has not disclosed pricing on the Leaf, but has said it expects theto be the first affordable, mass-market electric in the United States, Japan, and Europe by the end of 2010.
Nissan has bet heavily on electricand expects that by 2020, 10 percent of the world market will be for electric vehicles. It has announced a series of partnerships with utilities and government agencies to advance technology where it believes it has a chance of seizing market leadership.
The automaker said on Friday that it would cooperate with Houston-based Reliant Energy, a subsidiary of NRG Energy in developing a charging infrastructure for electricat homes and near office buildings.
Ghosn, who was speaking to reporters at an event outside Dodger Stadium to kick off a U.S. marketing tour for the Leaf, said Nissan would roll out theslowly in the U.S. market to get more feedback from consumers.
The Leaf is designed to draw power from a battery-pack developed with Japan's NEC that Nissan has said can be recharged overnight on a 220-volt connection.
Nissan has taken $1.6 billion in low-cost loans from the U.S. Department of Energy to revamp a plant in Smyrna, Tenn., to make the Leaf. The first models in the U.S. market will be imported from Japan.
Nissan's rivals have pushed competing battery-powered technologies. Toyota Motor dominates the market for traditional hybrids and has floated plans for a broader range of vehicles under the Prius name.
Others, such as General Motors and Fisker Automotive, aredesigns that rely on batteries for short drives but also include a gasoline-powered generator to recharge the battery on longer trips.
"We think this technology is a technology we control, but we need scale. And that is why today we are building an overall capacity between Renault and Nissan of 500,000and batteries a year that we are installing between the United States, Europe, and Japan," Ghosn told reporters.
"Hopefully, we are going to move upward. Because it is not about one, it is about four for Nissan and four for Renault."
is a way to bring down the upfront cost, analysts say, and Ghosn said he preferred to lease batteries because Nissan can have control over replacement as technology improves.
But while Nissan plans to lease batteries on a global scale, executives said that they are still studying whether to do so in the U.S. market.
Ghosn said the Leaf would be profitable for Nissan. By contrast, GM has said it does not expect to make money on the first sales of its, expected to be priced near $40,000 when it launches in late 2010.
"We will make money out of the Leaf," Ghosn said. "We have to make money, because if we don't make money the technology is condemned."
He added: "Everything we are doing today--and that is one of the reasons we are negotiating with the government--is to make sure this technology can continue to develop. We have a reasonable return on our investments and continue to develop the technology. And the consumer has to pay a reasonable price."