The competition is at last hotting up in the green car market. For along time, Toyota had it more or less to itself with the Prius no-plug hybrid. Soon there will be among others plug-in hybrids from GM and Ford, and a pure electric one from Nissan. Charmingly, the GM Volt will be Ampera in Europe; though Volta was Italian.
I have no idea whether hybrids will beat all-electric in the end. Hybrids give you the range of a gasoline-powered car, at the price of complexity, weight and cost. All-electric cars are simpler, lighter, and therefore cheaper: but have limited range. The Nissan LeafÂ´s current range is 100 miles (160 km) in a standard cycle. ItÂ´s lower at higher speed and temperatures: only 70 miles on a highway cycle at 55mph with the a/c on. They donÂ´t quote for 75 mph, so the range for real motorway cruising must be awful.
Renault-NissanÂ´s real test market isnÂ´t the USA, where the Leaf will be sold as a second car to rich urban trendsetters, but Israel – small, sealed off, and oil-less. In partnership with Israeli Silicon Valley entrepreneur Shai Agassi, they plan a network of battery-switching stations. My uninformed feeling is that battery technology will move quickly enough to make these unnecessary. A 200-mile range at 70 mph, combined with a network of 10-minute high-voltage rechargers, will get you anywhere. You need to stop that frequently anyway for coffee and a pee.
But in fixing this possibly temporary problem Renault-Nissan have solved a bigger one. Everybody else plans to sell green cars just like gasoline ones: a big fixed package, and you pay the (much lower) running costs. Since real people do not inhabit a frictionless financial world, the equivalence between higher capital and lower running costs will be imperfect, and work against the former. More important, the fixed-package model makes the buyer assume all the technological risks. Next yearÂ´s model will have a better battery and longer range; why not wait?
Renault-Nissan-Agassi plan to sell the car in Israel without the battery, and lease the latter. Since electricity is very cheap per mile compared to gasoline, consumers will be faced with a comprehensible comparison of running costs.
But to me, the real beauty is that consumers will be protected from a very asymmetric technological risk. The basic design of car bodies was settled a hundred years ago, and progress is now slow and incremental (satnav, ABS braking, etc). In batteries it is likely to be fast and bumpy. Leasing transfers this big risk back to the manufacturer, who is much better placed to plan for, price and hedge it.
Others please copy.
Footnote – update
The Renault-Nissan model that Agassi &c are planning to market in Israel isnÂ´t apparently the Leaf but a different one, an adapted MÃ©gane. This doesnÂ´t affect my argument in the least.