August 3, 2011

Nissan Corporate Vice President Simon Sproule discusses Nissan LEAF battery pack with the Global Media Center

Q1. Nissan LEAF hit worldwide sales of 10,000 last month, but one area that still attracts a lot of interest on-line is its batteries. I’m with Nissan Corporate Vice President, Simon Sproule, to talk about the LEAF. Simon, this is a LEAF battery pack. Can you tell me what it is going to be like in 10 year’s time if I buy a LEAF today?

A1.

We think that the life for the whole battery for the car will be good for at least 10 years. We think that most people are going to keep a LEAF for around five years.  Using what people would drive on an annual basis, which is typically 12,000-plus miles per year, you are looking at a useful battery life of at least 80 percent after five years.

Now, there has been a lot of debate on-line also about the replacement cost of a battery and how much that is going to be. Frankly, it’s very, very unlikely that anyone is going to have to replace an entire battery pack.

Q2. Has that happened so far?

A2.

No, it hasn’t, and I think if you really had a lot of damage to the battery pack it would be in a severe accident to the car. So typically what is going to happen is that people are going to need to replace the modules, and we have got the ability to open up the battery pack and replace the modules.

We think that the durability of the batteries is not going to be a weak point for the car. In fact, the available amount of memory capacity of the battery after five years is still going to be 80 percent, so it is going to be pretty good.

Q3. What about the cost for the replacement, even if it’s just a module?

A3.

There has been a lot of chatter online about tens of thousands of dollars or euros to replace a whole battery pack. Really, you are going to focus on the modules and the modules are going to be in the hundreds, not the thousands of euros or dollars, because if there is going to be a failure, it’s more likely to be an individual module, not the whole battery pack. Again, if you compare to an internal combustion engine, it’s very unlikely that if you had a failure on your engine after five years, you are going to replace the whole engine. You are going to replace one part of it.

Q4. One of the issues that you often hear about is the very famous “range anxiety” and clearly that’s still going to be an issue as long as the infrastructure isn’t as good as it could be. What kind of progress are you making with that?

A4.

We have been working for three years before the launch of the car, precisely to try to address the charging infrastructure. There are still large parts of the countries where we are selling LEAFs where the infrastructure is not what it should be, but it's a classic chicken and egg. Unless you bring a product and you get people to buy it, then no one is going to install the infrastructure in order to provide for those vehicles.

Now we have got the vehicles on the road, people are buying them and are putting pressure on cities and states and governments and [about] the charging infrastructure. We came first with the vehicle, the infrastructure we now see following fairly rapidly after that.

Q5. When using the fast chargers, which people will use when not charging at home, is that going to damage the batteries if they use it a lot over the long term?

A5.

The Internet chatter is that if you use it everyday you are going to completely wipe out the battery after 3 years, but you have got to remember that if somebody uses the fast charging system everyday, that means they are driving about 200 miles a day, which on an annual basis is over 70,000 miles.  There aren’t many people that drive 72,000 miles a year in any car, so it’s an unlikely scenario that somebody is charging fast-charge every single day.

What is the likely scenario is that people are charging up using a slow charger to charge domestically overnight, topping up the battery, and they are doing that two or three times a week or so depending on the usage cycle.

We think that heavy kind of constant fast recharge cycle is the extreme, we engineer for the extremes but the reality day-to-day is going to be nowhere near that.

Q6. What about the cost of charging? Overnight charging works out very well in comparison to using gasoline, but if you are charging during the day it can be very expensive, typically two or three times more. Is that a big problem?

A6.

What we are finding out from the real world data that we are getting is that people are tending to charge during the evening. They use the car during the day, and they charge up during the night. Sure, if you run your washing machine at night, you are going to pay less for the electricity than if you run it during the day. I think consumers are used to the fact that power has some elasticity in terms of its pricing and so what we are seeing is that people are managing their use of the LEAF and their use of their electricity around those constraints.

Q7. Finally, we mentioned that the LEAF sales have now hit 10,000 worldwide, but obviously the long-term goal is a lot more than that. But price may be still an issue for a lot of consumers with it being typically up to double the price of a regular gasoline car of a similar size in a lot of the markets. What progress are we making towards bringing the long-term pricing coming down?

A7.

The bottom line behind the whole electric-vehicle push with Nissan and with our alliance partner Renault is scale. Electric vehicles have always traditionally been very expensive and in fact the main part of the cost is here in the battery. What we are trying to do is by scale, by getting a lot of vehicles out there, is you reduce the cost overtime of the batteries.

Now, we’re seeing a lot of cities and states and governments are putting incentives in the market to help the early adopters, to help people initially get into the vehicles, but our business model is based on lowering the price of the vehicle, lowering the cost of the battery and assuming there will not be long-term government incentives in the marketplace. We think that scale ultimately is going to drive the price down, of both of the battery and of course, the whole electric vehicle.