Sceptics don't faze EV makers

Tesla's model S. Photo / Supplied

US electric start-up Tesla is about to roll out its first Model S sedan and is forecasting sales for the year of 5000 units, in spite of doubts about a satisfactory market for plug-in cars.

Recent setbacks to electric projects, such as the Chevrolet Volt spontaneously catching fire, and sluggish sales of the Nissan Leaf, have raised questions from industry observers, wondering if carmakers have misjudged the market for EVs.

Nissan chief executive Carlos Ghosn, eight months after launching large-scale manufacturing of the Leaf and the complex battery modules that power it, says "no". He is sticking to his guns that EVs will occupy a significant slice of global vehicle sales by 2020.

"I recognise the challenges and sceptics. I'm used to them," Ghosn said at the New York motor show, where he unveiled an Infiniti (Nissan's luxury arm) electric car. "One of the most frequent questions I get is whether I'm still bullish on EVs. Yes. I still believe they will be 10 per cent of the market in 2020 in all the regions where they are available.

" ... I have zero doubt that zero-emission is here to stay."

He said he expects the Renault-Nissan Alliance to sell about 1.5 million cumulative electric vehicles by 2016.

But things aren't going well, says Automotive News.

* Automotive research group J D Power and Associates forecast last year that consumers would blanch at the high price of EVs to the point where all electrics and plug-in hybrids combined will tally just 159,000 annual US sales by 2017.

* Last month, General Motors suspended production of its plug-in hybrid Volt, dogged by incident and slow sales.

* Fiat-Chrysler chief executive Sergio Marchionne says that Chrysler Group will lose more than US$10,000 ($12,210) on each planned electric variant of the Fiat 500.

But Ghosn is unbowed. He says launching an EV was never seen as a quick start for big sales, more a long-term process to position the Nissan brand for the future.

He says a study by Deloitte found that three out of five Generation Y respondents (30 and below) say they want an electrified vehicle more than any other vehicle.

"That puts Nissan in line with America's largest demographic group ever," he said.

Nissan will start production at a new US Leaf assembly operation in Tennessee, with a capacity for 150,000 a year.

Leaf sales in the US have been sluggish. The carmaker has sold only about 1800 units this year, against its target of 20-25,000.

But Ghosn said worldwide Leaf sales are still being supplied by a small Japanese plant. Complicating the car's introduction was last year's earthquake and tsunami and the strong yen, which makes Japan's vehicle exports uncompetitive.

The retail price of the Leaf in the US is around $45,000, less a government tax credit of just over $9000.

"The higher fuel costs go up, the less we need incentives," says Ghosn.

Meanwhile, Tesla says that customers who reserved the Model S are already sending in specification requests, indicating that the company is likely to hit its July deadline for first deliveries.

Tesla said internet connectivity would be an option on all cars. It said it would personally deliver the cars to the location of the customer's choice.

The Model S, the second model from Tesla after the Lotus Elise-based Roadster, will start at $70,000 for a version with a 260km single-charge range before the NZ$9000 tax credit goes into effect.