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Nissan (TYO: 7201) Introduces Low-Cost U.S. Leaf

U.S. Production to Cut Costs

Written by Swagato Chakravorty
Posted January 11, 2013 at 5:06PM

Yesterday, Nissan Motor Co. (TYO: 7201) commenced U.S. production of the Leaf electric car, with the goal of boosting relatively dismal sales by producing a cheaper model.

Next month, Nissan hopes to begin selling these new Leafs, which are being produced at its Smyrna, Tennessee facility. A major cause behind the anemic sales so far is the large battery pack, rendering the Leaf more expensive with a price tag of $35,000 than comparable gasoline-driven vehicles.

The Leaf doesn’t impress with its 80-mile per charge driving range. Making matters worse, the car requires a relatively long time to recharge.

Sales figures reflect these considerations. In 2012, just 9,819 Leafs were sold in the U.S.—vastly below the target of 20,000, the Wall Street Journal reports.

The new model, to be called the Leaf S, has an as-yet unknown price, though it will be eligible for $7,500 in federal tax credits and possible state tax credits.

The Tennessee facility can produce 150,000 Leafs annually. The domestic manufacturing process ought to reduce production costs, allowing Nissan greater flexibility in setting pricing.

One reason why the Leaf was priced at $35,000, above its initial offering price of $32,800, was the high yen vs. dollar exchange rate.

The changes that Nissan is implementing in its new electric vehicle—most significantly cutting recharge time in half and increasing the per-charge driving range—could allow the Leaf S to achieve much better sales figures.  



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