Renualt, Nissan & The EV

from: http://www.economist.com/business/displaystory.cfm?story_id=11332425

Charge!

May 8th 2008
From The Economist print edition

Renault-Nissan's ambitious plans for all-electric cars

COMMITMENT is one of Carlos Ghosn's favourite words. He makes commitments himself and he expects his senior managers in the Renault-Nissan alliance to do the same. His latest, and one of his boldest, is that Renault and Nissan will lead the car industry in developing profitable zero-emission vehicles.

In recent months Renault-Nissan has teamed up with Project Better Place, a Silicon Valley start-up, to introduce all-electric vehicles and a network of charging points in Israel and Denmark by 2011. Now Nissan is going further. Speaking at a media event in Portugal this week, Mr Ghosn said that the time for the mass-market zero-emission car has come. Nissan plans to launch a battery-powered car in America in 2010 and by 2012 the Renault-Nissan alliance will offer a complete range of electric vehicles in every large car-market. And these new battery-powered cars, it claims, will work out less expensive than equivalent petrol models.

Renault-Nissan's new electric-vehicle strategy is, says Mr Ghosn, the culmination of two years' work. It is the product not just of rising fuel prices and the prospect of new emissions rules, but the frightening environmental implications of rapid growth in emerging markets. At the Beijing motor show in April, he observed that “nothing can stop the car being the most coveted product that comes with development”—but that more efficient conventional engines were not the answer.

Technically, says Mr Ghosn, everything is now ready for electric vehicles to enter the mainstream—except for the batteries, in which Nissan and NEC, a Japanese industrial giant, are “investing massively”. What matters for all-electric vehicles—as opposed to hybrids, such as the Chevrolet Volt, due in 2010, which can fall back on a petrol engine when the battery runs out—are their limited range and the time taken to recharge their batteries.

When California briefly mandated the sale of electric vehicles in the early 1990s, their 50-mile range and long charging cycles meant that they failed to attract more than a dedicated core of green-minded motorists. But lithium-ion battery technology could push range to 200 miles, and fast-charge systems promise to provide a 70% top-up in only a little more time than it takes to fill a tank with petrol.

Another requirement is innovative business models. Mr Ghosn says the electric version of the Mégane saloon that Renault is building for Israel will come with a lifetime warranty, and payment will follow the model established by the mobile-phone industry. After buying the car, owners will subscribe to a battery-replacement and charging plan based on their anticipated mileage. Recharging will be done at one of 500,000 spots that Project Better Place will build and maintain.

When Nissan launches its new line of electrical vehicles in America in 2010, it will initially target fleet buyers, which can provide their own charging stations. “It will be a real business,” says Tom Lane, Nissan's global product-planning chief, “not just a way to sell 200 cars in California.” He expects sales to retail buyers to begin in 2012, at a price of around $25,000.

Nissan is also hedging its bets by developing both a “parallel hybrid” system (akin to that found in the Toyota Prius) and a plug-in “series hybrid” similar to the Chevy Volt. But it favours the all-electric approach, even though it will be a tough sell, says Mr Lane. As for Mr Ghosn, he has no doubts. “We must have zero-emission vehicles,” he says. “Nothing else will prevent the world from exploding.”