Last year, 13,000 drivers ponied up deposits to reserve a Nissan LEAF, Nissan's first all-electric vehicle.
The number of consumers racing to get their hands on this vehicle was a complete shock, and it really took Nissan by surprise.
In fact because demand was so robust, the company has been having a difficult time getting these things out the door and into the garages of car buyers.
About two weeks ago, Nissan announced 10,000 LEAFs would be built by the end of March.
The company also said its LEAF production output was being doubled to 4,000 units per month at its Oppama plant.
Unfortunately, the Oppama plant closed after the earthquake hit.
Nissan had expected the plant to re-open last Wednesday, but the reality is, you can't do much when power is only available about 60 percent of the time...
No one seems to know exactly how many LEAFs the company will be able to start pumping out again in the near term, but I wouldn't hold my breath for impressive numbers any time soon.
Nissan does have a new high-performance battery manufacturing facility under construction in Smyrna, Tennessee. This plant is expected to produce 200,000 units per year, and the facility will be built next to an existing Nissan plant equipped to pump out as many as 150,000 LEAFs a year.
It is possible that the company could ramp up efforts to get that plant online more quickly. Certainly, that would help Nissan get inventory out the door sooner — and it would provide some much-needed job creation here in the United States.
But the bottom line is that the combined forces of the initial magnitude 8.9 earthquake, the tsunami, the dozens of gut-wrenching aftershocks, and of course, Japan's nuclear crisis are going to significantly limit Nissan's ability to meet its delivery obligations.
And those who were lining up for the second batch of LEAFs could be waiting a very long time.
But you know how it is...
One Man's Loss is Another Man's Gain
Although Nissan execs had the foresight and the courage to be among the first to shun the naysayers and deliver an all-electric vehicle for the masses, the rest of the majors are not far behind.
Ford (NYSE: F) is on track to deliver its Focus Electric by the end of the year. This is an all-electric vehicle expected to deliver about 100 miles per charge. (More than 70 percent of U.S. commuters drive 40 miles per day or less, according to the Bureau of Transportation Statistics).
And the Focus Electric has an advantage over the LEAF in that the vehicle's on-board charger allows it to charge in half the time Nissan's electric offering does.
Also worth noting is that earlier this year, Ford worked out a deal with Best Buy that would allow Best Buy to sell and install charging stations. These charging stations will cost the average consumer about 30 percent less than what has been quoted for LEAF owners.
Of course, a charging station isn't a deal breaker...
And with the initial demand we've seen with the LEAF, it is highly unlikely that Ford will swallow all of Nissan's market share.
Truth is, there's plenty of demand for all car makers to capitalize on electric vehicle development. And because Nissan pounced first, the automaker will certainly continue to benefit from its early entry into this market.
But with Nissan's operations being given a major blow from Mother Nature, Ford definitely has an opportunity to swoop in and capitalize on Nissan's inability to meet demand — a demand that will only become more robust as gas prices continue to soar.
And the good news for Ford is that this electric vehicle opportunity is just one of many advantages the auto manufacturer now has over its competitors.
The average price for a gallon of 87 octane will be $4.00 this year. Next year, $5.00 a gallon will be the reality.
When this happens, no one will care about tax credits or discounts for charging stations.
All they'll care about is getting their hands on a vehicle that's not going to put them in the poor house every time they need to fill up their tank.
Nissan, Toyota, Ford, GM, Mitsubishi, Tesla, Honda, Daimler, Volvo, and a handful of others will all have some kind of electric vehicle in production and on the streets next year. This is a fact.
And the price premiums on those vehicles will definitely be overshadowed by the pain at the pump...
It's coming, my friends.
Editor, Energy and Capital