Nissan is raising the price of its Leaf electric car by several thousand dollars, the company says.
The 2012 Leaf, an all-electric car Nissan launched last year, will come with more features and the car will be sold in 21 additional states by the end of the year. The 2012 Leaf, with a starting price of $36,050, will go on sale in the fall, the company says.
The 2012 sticker price is an increase of $2,450 over the 2011 Leaf. But the company says the zero emissions Leaf will perform better in cold climates thanks to a battery warmer, and it will have heated seahe Lts and a heated steering wheel among other additions.
GM's Volt, a competitive car to the Leaf but a car that has gas backup capability, will cost $39,995 as a 2012 model. Both the Nissan'sLeaf and the Chevrolet Volt quality for a $7,500 tax credit in most cases.
Both cars are being positioned by the automakers as solutions to America's dependence on oil. The Leaf is a 100 percent plug-in electric car while the Volt has a gasoline-powered generator that can be employed to give driver's more range. Both cars are also attracting first-time customers to the respective brands, and frequently buyers of the cars previously drove a Toyota Prius, the first mass-produced gasoline-hyrbid car in America.
One car runs on gas, but it won't need much. The other car is 100 percent pure electric.
Say hello to the new car, is how Nissan markets the Leaf, noting it has zero tailpipe.
The all-electric Leaf was so quiet in the development phase that engineers and designers had to come up with a solution, adding noise so drivers and pedestrians know the car is running.
For Nissan (NASDAQ: NASNY) the Leaf is a big bet that shows promise in paying off. The Leaf passed the Volt in June in U.S. sales, and the company says it can build 150,000 Leafs each year at its Smyrna, Tennessee factory when the car reaches production there next year.
Nissan's Big Electric Bet
Nissan never really joined the first wave of attacks in the battle to build America's next-generation car, the hybrid. While most other automakers followed Toyota's Prius lead in recent years, rolling out multiple alternative-fuel, environmentally friendly cars and SUVs, Nissan only offered consumers in some states the Altima Hybrid, a gas-electric vehicle.
With its North American headquarters in Franklin, Tenn., Nissan took a different route. Company executives never were sold on the theory that emissions-reducing hybrids are a long-term solution to pollution issues, believing instead they are an intermittent option. So while competitors rolled out one hybrid after another, Nissan was working behind the scenes on something different -- an electric vehicle that uses no gas and produces no emissions.
In business lingo, such strategy is known as placing a big bet -- virtually sitting out one wave by trying to leap ahead to the next.
Launched in late 2010 with models built in Japan before production is moved for a full-capacity roll out the Smyrna in late 2012, the Leaf is a plug-in electric car with a range of 100 miles per charge. The compact car sells for $33,630 excluding any tax credits, holds five passengers and travels at speeds of up to 90 miles per hour.
Through the first half of this year, Nissan sold 3,894 Leafs and based upon reviews and strong initial customer demand, the company expects to continue the momentum -- and it's going directly after Chevrolet's Volt in marketing efforts to make it happen. Nissan is hoping to take advantage of two competitive factors in aggressively positioning the Leaf against the Volt.
1) The Volt costs more if Nissan keeps its 2011 pricing in check, with an MSRP of $39,995 for the 2012 model.
2) The Volt uses gas. Not much, but it still uses gas.
Currently Nissan sells the Leaf in Arizona, Hawaii, Texas, Tennessee and on the West Coast. Beginning in late July, customers in Alabama, Florida, Georgia, Illinois, Maryland, Mississippi, North Carolina, South Carolina, Virginia and Washington, D.C. can begin ordering Leafs. By year's end, Nissan will sell the Leaf in 28 states.
Chevy's Volt will be available nationwide.
Production of the Volt began last fall in the U.S. GM has sold about 3,000 Volts since the car went on sale in late 2010. GM is betting big on the Volt as well, considering the company has been touting it in marketing and public relations efforts for years now and has hundreds of millions invested in the car, if not $1 billion. GM plans to build 16,000 Volts this year and the company says it could eventually build 100,000 if demand dictated. The car is expected to be available nationwide by the end of 2011, according to GM.
The company touts the Volt as an electric car since it primarily is, but since the Volt has some gas capacity, GM is selling that fact as an advantage to customers who perhaps don't want to be bound by limited range. With the Volt, GM argues it gives customers freedom from gas but safety from gas as well, since gas can be utilized on longer road trips while the Leaf would have to be re-charged to keep going.
Chevrolet's Volt has Gas Backup
When the battery is depleted, says GM in a Volt performance specification manual, a small, quiet onboard gas generator creates electricity that powers your Volt as you drive for hundreds of additional miles.
GM says the Volt is Chevrolet's electric vehicle that can use gas (but only if you need to).
Although neither the Leaf or the Volt figures heavily into immediate sales figures for either Nissan or GM the reason so much effort is being given by the companies to marketing and comparing one against the other is simple. When competing technologies vie to win over consumers as trend takes a major shift, only one typically emerges as the clear winner.
That's why Toyota's Prius remains branded as the world's leading hybrid despite the fact that dozens of hybrids are now sold by automakers worldwide. The company invested $1 billion in the 1990s to create the Prius and was the first global automaker to put a hybrid engine car on sale with the Prius. Now, both GM and Nissan are vying to establish their cars and technologies as the first of this next transitional shift -- to all electric, or almost.
Both companies are benefitting at this point from the fact that surveys show each is picking up new customers with the cars -- customers who previously had purchased cars from other brands.
As for the longer term, many observers view GM at a disadvantage because they believe the company cannot produce the Volt as affordable as Nissan can product the Leaf, creating a money-losing proposition for some time should sales of the Volt take off, even as cost comes out. Others, though, see the Volt as having an advantage because it does have gasoline as a backup, preventing the risk of a driver getting stuck on the road without a charge.