Even before Leaf launch, Nissan plans battery growth

(Credit: Automotive News)

NASHVILLE--A year ahead of selling its first electric car, Nissan North America is already wondering whether it will need more factory capacity for batteries.

The potential U.S. demand for electric cars is far from clear, but Nissan could find itself without enough batteries to meet its plans, says Carlos Tavares, Nissan Motor Co.'s chairman for the Americas.

The company is spending $2 billion to expand its plant in Smyrna, Tenn., to produce 150,000 five-passenger Nissan Leafs a year in 2012 and 200,000 lithium ion batteries to power the hatchbacks and serve as replacement batteries.

But Nissan also is developing two more electric vehicles to follow the Leaf, Tavares says.

And in addition to the three new electric models, the company eventually wants to convert some existing gasoline models to battery power, Tavares says.

"It would trigger additional capacity," he told a small group of reporters.

"The current invested capacity is not going to be enough."

U.S. Nissan dealers will not be the Leaf's only customers.

The $2 billion Smyrna investment is intended to supply dealers in all markets, from Canada to South America, Tavares says.

Tavares, who also heads Nissan in markets such as Brazil and Argentina, says South America will be a tough sell.

He says government commitment is critical to install the public recharging network necessary for electric-vehicle sales.

"It's not going to spark as fast as the United States," Tavares says. "There will be a time lag. Some of those markets have already taken another direction. For example, Brazil is moving toward ethanol."

Over the past year, in hopes of spawning recharging networks, Nissan has formed partnerships with governments and utility companies in 30 overseas markets, including China, France, the United Kingdom, and Israel.

Nissan North America has formed partnerships in a number of U.S. markets, including the states of Tennessee and Oregon; San Diego and Sonoma County, Calif.; Seattle; Phoenix and Tucson, Ariz.; and Raleigh, N.C.

The Leaf will be imported from Japan for U.S. retailers in those markets in the third quarter of 2010. The imports eventually will be replaced by production from Smyrna.

Tavares says Nissan North America will begin taking sales orders for the Leaf next spring and expects to have 20,000 presold by the time the model reaches U.S. showrooms.

(Source: Automotive News)