Renault Develops an Electric Vehicle for Israel, and a Small Car Strategy for the World

By Michelle Krebs January 22, 2008

By Nick Kurczewski Nissanrenault_israel_electric_car_2

PARIS -- Renault-Nissan CEO Carlos Ghosn sees Israel as the perfect test bed for selling electric vehicles, due to the country's small size and its residents' driving habits.

Renault has announced an ambitious project to market electric vehicles in Israel by 2011. Powered by a lithium-ion battery pack developed by Nissan, the car will have a range of 60 to 100 miles between recharges. The fully-electric vehicle will be built in Europe and sold in Israel, before eventually arriving in Asia, Europe and the U.S.

The car will be badged as a Renault or Nissan depending on each market.

Ghosn pointed out that up to 90% of Israelis drive less than 70 kilometers (43 miles) a day, and all major cities are within 150 kilometers (93 miles) of each other. Therefore, the electric vehicle short-coming of limited battery range is not nearly as daunting an obstacle in Israel as it could be in other markets, where drivers routinely cover much longer distances. 

Ghosn also promises that Renault’s electric car will be priced to compete with similarly sized gas-powered rivals. This statement is bolstered (at least in Israel) by news that the Israeli government has extended tax incentives to owners of zero-emission vehicles.  Similar incentives are likely to be used in other markets around the world – much like the hefty incentives used in the U.S. to tempt car buyers into the first wave of hybrid vehicles.   

The exterior packaging and dimensions of Renault’s electric vehicle have not yet been disclosed. This makes it difficult to peg the car’s eventual pricetag.   However, Renault’s press information promises “driving performances similar to a 1.6-liter gasoline engine.” 

In America, fuel-sippers like the Mini Cooper, Honda Fit, and Toyota Prius all come with engines that are 1.6-liters in capacity, or less. Using these vehicles as examples, a pricing estimate of $15,000 to $18,000 seems fair for Renault’s electric car. (Another educated guess is that this car will wear a Nissan badge in the States.) 

Ghosn announced that Renault’s electric car will come with a lifetime warranty. Payment will follow the model set by the cell phone industry. A consumer will buy and own the car, and then subscribe to an energy and battery plan that corresponds to his/her own driving habits.  More miles driven each month corresponds to more expensive energy and battery plans.   

Recharging will be done at one of 500,000 spots being established by California-based Project Better Place.  A display in the car dashboard will indicate how much charge is left, and the location of the nearest recharging station. Project Better Place will construct and maintain all the recharging stations. Rather than diverting the problem of energy usage from emissions-spewing tailpipes to overburdened power plants, Project Better Place will use renewable energy sources - such as solar and wind power - to provide energy to its stations.

Project Better Place plans to use Israel as a pilot program for its “Electric Recharge Grids.”  However, the company is not alone in the electric vehicle infrastructure market.  Similar projects are underway in Paris and London, and have the backing of industry heavy-weights like Électricité de France (EDF) and Toyota.

Renault's electric vehicle announcement is the latest in a series of maneuvers in which Renault is tailoring its automotive know-how to each market’s unique demands. At the recent New Delhi Auto Expo, Bajaj Autos unveiled a concept car that is being co-developed with Renault-Nissan. With an estimated price of only $3,000, the Bajaj Autos/Renault-Nissan small car follows the lead of the $2,500 Tata Nano, by targeting first-time car buyers in third world economies with an extremely low-cost automobile. 

Renault also sells the wildly successful Logan sedan and wagon throughout the world. Originally designed for markets in Eastern Europe, Africa and the Middle East; the bare-bones Logan is now a sales hit with bargain-hunting car buyers in Western Europe.  Sales of the Logan jumped nearly 50% from 2006 to 2007. 

Earlier this year, Renault announced that its overall sales increased 2.2% in 2007 – thanks to a wave of revamped models like the new Twingo super-mini and the mid-size Laguna hatchback and wagon.  Renault predicts sales growth of at least 10 percent in 2008.

Photos by Renault-Nissan

Attending the press conference to announce Renault's plans for an electric car in Israel were (left to right) Shai Agassi, CEO of Better Project Place, Prime Minister Ehud Olmert, and Nissan-Renault CEO Carlos Ghosn.

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