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Nissan sees EV costs falling in Smyrna

Automotive News reports on Nissan's plans to build its Leaf electric car in the U.S.

Automotive News

NASHVILLE, Tenn.--Nissan North America believes building its low-volume, high-priced electric Leaf in the United States will make the car less expensive to produce.

The imported electric, a five-seat family car that carries a $33,630 sticker, including shipping, is scheduled to go into production here in late 2012 after completion of a $1.6 billion construction project to assemble the car and its lithium ion battery modules in Smyrna, Tenn.

Most of that investment is going into a battery factory that will yield as many as 200,000 battery modules a year starting in 2013.

Those battery packs represent a large part of the sticker price of the electric Leaf, as they do with any electric car. Estimates vary, but the cost of a battery pack for an electric car ranges from $8,000 to $12,000.

Bill Krueger, the company's North American manufacturing and supply chain chief, is confident that local production will allow Nissan to begin driving down the cost.

"With a new technology, the cost of up-front R&D and the cost of just getting off the ground at a low volume give you a higher cost of production," Krueger says. "That's similar to all new technology.

"But as the volume increases and we localize production, we're going to drive cost down. Step by step and phase by phase, cost will be managed out."

Among the immediate gains will be lower shipping costs and currency protection.

For the current Leaf, Nissan gets the battery pack from a supplier in Zama, Japan, and installs it in cars built in Oppama, Japan.

Starting with the 2013 model, the battery and car will be produced in-house on adjacent assembly lines at Smyrna.

Krueger has a team of technical workers and trainers in Japan studying the assembly process, looking for improvements that can be made when the Leaf begins production in Smyrna.

While Japan can build about 50,000 Leafs for all world markets, Smyrna will have the capacity to produce 150,000 a year for the Americas region.

Krueger also wants to localize more Leaf components, including the car's electric motor, but no decision has been made.

"The higher the volume," Krueger says, "the more it makes sense to localize many, if not all, of the components in the future."

(Source: Automotive News)