Nissan Motors (PINK: NSANY) is expected to begin taking orders tomorrow on its new Leaf, the electric vehicle that aims its price-point to everyday consumers. The Nissan Leaf price should run $28,000 to $35,000 for a well-equipped C-class version of the electric vehicle.
The debut of the Nissan Leaf will either push the electric vehicle movement forward toward greater financial success or showcase exactly how far it’s still got to go.
Nissan previously has been accepting reservations for its Leaf electric car and already has 18,000 pre-orders, with the hope of reaching 20,000 by December, according to a company spokesman. More than half of the reservations are from the five proposed states – Arizona, Tennessee, California, Washington and Oregon – where the Leaf will be rolled out. The automaker predicts the vehicle will be available everywhere in the U.S. by the end of 2011.
Inside the industry and with consumers, the car appears to be headed to high demand, at least as far as an electric car is concerned. Rental giant Hertz (NYSE: HTZ) plans to offer the Leaf in the U.S. and across Europe. Price point is a huge factor that is generating the most news. The Leaf is priced quite less than the $41,000 Volt, and with the potential of up to $7,500 in a federal tax credit, you’re looking at perhaps $25,280 for an entry-level electric car.
But just how ready is the electric vehicle market? For the immediate future, at least, it may not be quite the moneymaker that some have forecasted for the simple reason that in this economy, demand is just not there yet
General Motors and its Chevrolet Volt have started taking orders through August. The Chevy Volt will go on sale in November, but suffered PR problems when reports of price gouging swept the blogosphere. Though charging a premium for a popular car offered in limited release is legal for a dealership, outrageous price reports have put the vehicle as high as $20,000 more than the MSRP. Not a good start.
And, after three and a half years, the buzz has dialed down to a low drone. Truth About Cars Editor Edward Niedermeyer panned the car as “GM’s Electric Lemon” in an editorial in the New York Times, lambasting its dull styling and pointed out that it will likely lose GM money.
Still, GM in July announced it will offer 45,000 Volts in 2012, instead of the originally planned run of 30,000. It’s a big move, in part because the Volt is an untested product. Is the buzz on electric vehicles giving the automaker additional confidence – or are they just willing to take a bigger risk?
Despite the buzz over Leaf and the Volt, Ford’s (NYSE: F) new electric van is about to hit the market with little fanfare – mainly because it will be rolled out as a commercial van and not a consumer product. Not quite as sexy as the futuristic market of high-performing vehicles. Ford’s Transit Connect EV will go on sale later this year, selling mostly to commercial fleets.
The overseas market, though, is eagerly awaiting electric options. In China, the Volt will not qualify for a subsidy, but GM notes that wealthier citizens are very accepting of any vehicles that promote a more “green” status. Chinese automakers are rushing to produce their own electrical cars, with pricing below that of Volt or Leaf, drawing on vast battery manufacturing capacity and governmental desire to reduce pollution and improve energy efficiency. Chinese carmaker BYD, backed by U.S. billionaire Warren Buffett, said it will soon export its E6 electric car in the U.S.
The auto industry will have its eye on profits – and past examples aren’t looking good.
Electric carmaker Tesla (NASDAQ: TSLA) offered up an IPO recently, but still hasn’t turned a profit. The company in early August posted a wider second- quarter loss as it moved additional funding into research and development for the $57,400luxury Model S sedan planned for 2012. Tesla reported a second-quarter net loss of $38.5 million ($5.04 per share), from a $10.8 million loss ($1.56 per share)a year ago.
With gas prices falling as summer draws to a close, the launch dates aren’t exactly coinciding with a time that consumers are feeling the pinch at the pump that they were used to. The average price for gasoline in the U.S. fell to $2.68 per gallon, a six-cent decrease from July. Experts predict the trend to continue, at least through September. And buyers – both consumers and commercial – are looking at these cars in large part on a fuel-savings basis. If the car costs too much, they won’t see the savings at the pump that they want as quickly as they expect it.
Of course, if it’s a status thing, it may take the economy to get rolling again before anyone thinks of “green” as anything else besides having to do with money.
As of this writing, Burke Speaker did not own a position in any of the stocks named here.
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