2014 Nissan Leaf
With the 2014 Nissan Leaf going on sale this week and next, Nissan is poised to expand production and dramatically boost sales of its U.S.-built battery-electric hatchback.
And if its CEO has his way, sales will double in 2014, from the 22,610 Leafs delivered in 2013 to 40,000 or more, perhaps as many as 50,000.
Nissan CEO Carlos Ghosn told CNBC yesterday--as reported by Bloomberg--that last year's surge from 9,800 to 22,600 sales was just the start.
It takes roughly six months of lead time to boost production at the Smyrna, Tennessee, assembly plant where Leafs are built for the Americas--and Nissan ordered that production increase last summer, according to company executives.
2014 Nissan LeafEnlarge Photo
Flat-out last summer
Demand for the Leaf began to bump up against available production as early as last summer, according to a July interview with Nissan's director of electric-car sales and marketing, Erik Gottfried, in the trade journal Automotive News.
The company was "supply constrained" during the second half of last year, said Jose Munoz, Nissan's senior vice president for sales and marketing in North America, at a conference in November.
That constraint had been openly discussed as early as last August by Nissan's vice president in charge of global Leaf sales, at the Nissan 360 event held in Southern California.
Hayes explained that supplies of the electrode material, made in Japan, had to be ordered, produced, and shipped to Smyrna before more lithium-ion battery cells could be assembled to power the Leafs coming off the assembly line.
Similarly, the company planned to add a third shift to its electric-motor plant in Decherd, Tennessee, to boost output of the traction motor that powers the car, according to Automotive News in August.
But it planned for production to start increasing in December and January, and that now appears to be occurring--with December sales of 2,529 units, the best month ever for the Leaf.
Ghosn told CNBC that Nissan is now on a trend to deliver 3,000 Leafs a month--and that 4,000 would be the next logical step--though he didn't specify a date for that boost.
2014 Nissan LeafEnlarge Photo
Sales broaden out
While the Nissan Leaf is widely available throughout the United States, its sales are remarkably concentrated in a handful of areas, many of them on the coasts.
Its earliest sales were concentrated in California, which offers a $2,500 purchase rebate on the electric car as well as single-occupant access to the carpool lane on the state's crowded freeways--two important incentives.
But by last summer, demand was surging in places like Dallas; St. Louis; Raleigh, North Carolina; and Atlanta, which Nissan has said is its single most concentrated market for the Leaf--aided by a $5,000 state income-tax credit for the purchase of a battery-electric car.
Running the numbers
With increased production in Smyrna, if Nissan can boost its sales to 3,000 a month or more, the Leaf could overtake the Chevrolet Volt range-extended electric car as the most popular plug-in vehicle sold in the U.S.
From December 2010, the month both cars went on sale, through the end of 2013, 54,500 Volts had been sold against 42,000 Leafs. But Volt sales stagnated in 2013, despite a $5,000 price cut, while Leaf sales doubled.
If Nissan sells an average of 3,550 Leafs a month during 2014--an aggressive but hardly impossible goal--it could deliver more Leafs this year than it had in the three previous years combined.
And even if it averages just 3,000 Leafs a month, that would boost the electric car to 6.5 percent of Nissan's U.S. sales volume.
All in all, it looks like 2014 could be the year the Leaf finally takes off in the United States. The big question then becomes: Will GM try to follow suit with its costlier Volt?
Stay tuned for more news in this interesting battle of the plug-in electric cars.