Automaker Nissan Motor will sell 500,000 electric vehicles annually by the end of 2013, Renault Nissan CEO Carlos Ghosn told reporters on eve of the market debut of the Nissan Leaf.

Nissan is launching its all-electric Leaf, which has a 100 mile range, in December. It plans to sell 20,000 Leafs in the United States over the next year.

Ghosn predicts that because of strong consumer demand, Nissan will be capacity constrained for the Leaf for the next three years.

Nissan and Renault will each have four electric vehicle models by 2013.  Nissan also plans to produce 200,000 battery packs annually and 150,000 vehicles in the U.S. alone by 2014 in its Leaf factory in Tennessee.

We're going to have to put some efforts into selling the car, but the kind of spontaneous demand is going to be driving the sales for the next three years, Mr. Ghosn said. There is such a curiosity about the car and attention to the car.

Ghosn predicted that 10 percent of the world car market would be electric vehicles by 2020. There is no doubt in the minds of anyone in the industry that this is going to be a big factor in the industry, he said.

Nissan has priced its five-passenger 2011 Leaf at $32,780 plus a not-yet-announced destination fee. As an all-electric vehicle, the Nissan Leaf qualifies for a $7,500 federal tax credit. This brings the price down to $25,280, making it an affordable choice for a cutting edge alternative vehicle. Additionally, Nissan has arranged for consumers to either buy or lease the Leaf and will begin delivering the vehicles in December.

Electric vehicles (EVs) purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.

Governments across the world have set aside billions of dollars in the form of subsidies for early adopters of these alternative energy cars and to boost production of batteries for such vehicles despite persisting doubts about how many people will actually buy them.

The Department of Energy said it is investing $2.85 billion in electric vehicles of which $2 billion will go to help American carmakers produce advanced vehicle batteries and drive train components. Around $400 million will be invested to buy, test, and deploy different types of electric vehicles in the marketplace, and $300 million in cost-share projects under the 'Clean Cities' program.