At a recent automotive conference in Detroit, Nissan Americas chairman Carlos Tavares hoisted a large car muffler over his head and then accused Nissan’s competitors of misleading people when it comes to electrically powered vehicles. “If you’re calling your car electric and it has one of these,” he said, waving the auto part. “You’re only muddling the message.”
Though sales of electric or hybrid electric vehicles represent a tiny fraction of the overall market, automakers aren’t pulling any punches when it comes to talking up their newest creations. The nascent segment, which automakers have pumped many billions of dollars in research and development into, is fast becoming one of the most competitive. But the rush to go green has created an unintended consequence: consumer confusion. Each automaker has come up with its own take on the electrified car of tomorrow, a category that also includes hybrids and plug-in hybrids—both of which incorporate a gasoline engine. And nobody wants to get stuck with a four-wheeled equivalent of a Betamax in the garage.
For its part, Nissan is betting the future won’t involve gas stations at all. Its compact Leaf electric car, the result of US$6 billion in research and development that began in 1992, is touted as the first-ever mass-produced electric vehicle, and is priced to compete with cars powered by conventional engines (it costs about US$32,000 in the United States before government incentives, which can bring the sticker price down to around US$20,000). “That’s why we went to Detroit with a muffler,” Tavares said during a recent interview with Maclean’s in Toronto. “We wanted to explain to people visually that when you have a zero-emissions car, you don’t have a tailpipe—because there is no gas.”
The Leaf goes on sale in Canada later this year, although prices haven’t yet been announced. It looks like a regular compact until you pop the hood. Underneath is a virtually silent engine (engineers actually added a noise at low speeds so pedestrians can hear it coming). The direct-drive motor draws power from a table-sized battery hidden beneath the seats that gives the car a range of around 160 km on a single charge. The Leaf handles not unlike a Toyota Matrix, albeit with a bit more pep off the line. In exchange for never having to visit a gas station, Leaf owners are asked to pay roughly $2,000 to install a charging station in their garages, which can complete a full charge in seven hours—essentially overnight. “Ninety-five per cent of people drive less than 100 miles per day,” says Tavares. “It’s a fact. For anyone that commutes and lives in the suburbs of big cities, it’s the perfect car.”
Of course, Nissan’s competitors beg to differ. Toyota has already staked out its territory with its 10-year-old Prius hybrid, betting that people are mostly looking for better fuel economy (the Prius is basically a regular car with an electric engine that takes over periodically, after harnessing energy from the brake systems). Meanwhile, GM has put its money in its plug-in hybrid Volt car (US$41,000 before government incentives), which runs off its battery for the first 56 km before a gasoline backup engine kicks in to power an on-board generator. GM claims this eliminates the “range anxiety” of pure electric vehicles (which can’t stop at a gas station for a quick fill-up), a point hammered home in a recent Volt ad that plays up the unpredictability of life on the road. So far, the message appears to be resonating with early adopters. In January, General Motors says it sold 321 Chevrolet Volts in the U.S. while Nissan has sold just 87 Leafs.
Tavares, however, says the endgame is pure electric—he calls hybrids and plug-in hybrids “transition” technologies—and points to recently unveiled concepts such as Ford’s Focus electric as evidence its rivals are already coming around. In fact, Carlos Ghosn, the CEO of Nissan-Renault, has forecast that electric cars will comprise 10 per cent of the market by 2020, with Nissan comfortably in a leadership position.
But observers remain skeptical. “That seems pretty lofty,” says Mike Wall, an auto analyst at consultancy IHS Automotive. He notes that fuel efficiency of conventional cars continues to improve and that the price of electric vehicles remains comparatively high. “Consumers haven’t all of a sudden forgotten about prices,” he says.
Tavares, however, likens it to the shift to mobile phones, which went from being a niche gadget used by businessmen to widespread adoption seemingly overnight. “The trigger for the mass market is when you shift from early adopters to pragmatists,” he says, adding that the cost of charging a Leaf is only about $2.50. “And pragmatists will make the calculation that, the higher the oil price, the bigger the savings will be.”