Critical pieces of the EV puzzle
When it comes to electric cars, probably the biggest bull in the auto industry is Nissan/Renault, at least in terms of forecasts. According to this alliance, electric cars will achieve 10 percent penetration by 2020. Consequently, along with the Leaf, Nissan et al will launch an additional 4 electric cars in Europe in 2011 and 2012 (all pictured above).
More important, Nissan/Renault are ready to spend $5 billion to make their EV plans happen.
$5 billion is unquestionably a pretty serious number – a number that could absorb a lot of losses on the first few generations of electric cars in the name of dominating EV supply chains and manufacturing capabilities. Consequently, in 20 years, what might seem a $5 billion loss by 2020, could lead to nice profits by 2030 – when EV penetration should begin making serious gains in market share.
Aside from the $5 billion investment, the other interesting part of this story is the “subscription” model of battery leasing that Nissan/Renault seem to be envisioning as a critical element of higher levels of EV penetration.
In the past GM and Better Place have also discussed battery leasing, and it seems short term EV success – and 10 percent penetration by 2020 would definitely be a success – will require something beyond basic EV sales.
Still, a “subscription” just for the battery and extra battery services? Wouldn't straight vehicle leasing be simpler?
Perhaps not. If there is a problem with a lithium-ion battery pack, much of the pack will probably still be very useful. Consequently, through a “subscription” service, Nissan might be able to replace battery packs with recycled and refurbished battery packs at a much cheaper cost than replacing with a brand new battery pack.
Sure that probably isn't a path to short term profitability, but long term such an approach might make sense, as lithium battery recycling could eventually become a huge business in and off itself. Additionally, such an approach can probably also help Nissan better manage its EV warranty obligations.
Green? I'm still not going to put that word in the same sentence as Nissan (see earlier post). Nevertheless, if Nissan dominates EV sales by 2020, I might be tempted to rethink their color.