Nissan Motor Co <7201.T> is falling well short of its goal of doubling sales of its Leaf electric car this fiscal year as sales in the United States are particularly weak despite high gas prices.
While Nissan Chief Executive Carlos Ghosn set a target of doubling global Leaf sales in the current fiscal year that runs through March 2013, the pace will need to increase dramatically as they are up only 9 percent in the first five months through August.
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Leaf sales in the United States are down 56 percent from April through August, and down 31.5 percent this calendar year.
Nissan North America spokesman David Reuter said U.S. sales should improve once it ships more to the markets where it sells best. Leaf debuted in December 2010 in Japan and in seven metropolitan areas in the United States.
Leaf is not the only EV to struggle in the U.S. market. General Motors Co's Chevrolet Volt plug-in hybrid car has come up short of expectations, forcing the U.S. automaker to idle the plant that makes the car. In addition, Fisker Automotive's Karma plug-in has experienced numerous problems and was just panned by Consumer Reports for being "plagued with flaws.
Overseas, however, Leaf has fared better. Sales so far this fiscal year are up 125 percent in Japan, where demand was hurt last year by the March earthquake and tsunami. They are also up 207 percent in Europe, where the Leaf did not roll out as quickly.
Nissan has sold 37,285 Leaf since it was introduced. Of that figure, 17,710 have been sold in Japan; 13,921 in North America; 4,881 in Europe; and 773 in other markets, Nissan said.
LEAF BUY BACK
Unrealistic expectations among U.S. consumers about EVs also have hurt as Nissan agreed to buy back two Leafs from unsatisfied customers in Arizona, where seven owners have been vocal in online forums about their dissatisfaction, mainly over the shrinking of energy storage capacity of their lithium-ion batteries.
Reuter said the Arizona drivers were operating their cars beyond Nissan's recommendations. When tested by company engineers, all seven cars were performing within expectations, he said.
The Leaf is "not for every driver," said Reuter.
"You need to make sure your driving style and driving needs fit the output of the vehicle," he said. "We know that the wide majority of U.S. drivers drive no more than 40 miles a day. The Nissan Leaf is a perfect vehicle for those individuals. For those who drive more than that, it may not be."
The Arizona drivers were using and recharging their batteries at a faster rate than most Leaf drivers, causing the batteries to lose capacity quicker than the manual told them to expect.
The affected Leaf owners were averaging 16,500 miles annually, Reuter said. The car's owner's manual says that under normal conditions and with average annual mileage of 12,500, the energy storage capacity of a Leaf will drop to 80 percent in five years, Reuter said.
The customers in Arizona became concerned when their Leaf models, with an average age of about 15 months, were down to 84 percent or 85 percent already, he said.
A battery's capacity shrinks relatively quickly in the early stages of use and then tapers off, Reuter said. By the time a Leaf battery is 10 years old, it will have about 70 percent of its initial capacity, he said.
TENNESSEE LEAF PRODUCTION
The Leaf is in its first generation. The company has not said when it will introduce the second generation, but the new 2013 model will have some different features, which Reuter would not divulge.
The 2013 Leaf will be introduced in the U.S. market in the first quarter of 2013, the same time production of Leaf models will begin at the Nissan plant in Smyrna, Tennessee. So far, all Leaf cars have been made in Japan.
The Leaf battery plant next to the Smyrna assembly plant will open within a few days, Reuter said.
It will have a capacity to produce 200,000 lithium-ion batteries a year. The assembly plant will be able to produce up to 150,000 Leaf models a year, well beyond expected demand in the near-term.
(Reporting By Bernie Woodall; Editing by Kenneth Barry)