Nissan Plans Big With New Battery Plant | Edmunds

Nissan Plans Big With New Battery Plant


Just the Facts:
  • Nissan recently showed off its new EV battery plant in Smyrna, Tennessee.
  • Nissan cut the cost of the 2013 Leaf by $6,400 by moving both vehicle and battery production to the United States.
  • Another part of Nissan's strategy to boost Leaf sales is to expand the charging infrastructure in order to encourage more ease of use of EVs.

SMYRNA, Tennessee — Nissan is betting big on electric cars and lithium-ion batteries and is not afraid to show off its optimism. The company recently showcased its brand-new (largest in the U.S) battery plant in Smyrna, Tennessee, to media as a way of introducing its new lower-cost, American-built Nissan Leaf EV.

Nissan cut the cost of the 2013 Leaf by $6,400 by moving both vehicle and battery production to the United States. First response in the marketplace appears good, as March 2013 sales set a record at 2,236 units.

The ability to cut the price is due in part to the move of production to the U.S., which cuts supplier and shipping costs and avoids a currency disadvantage created by the yen's value versus the dollar. Nissan also got a boost via a Department of Energy loan in 2010 that gave it $1.448 billion to retool the vehicle plant in Smyrna and build a new battery plant.

In making the loan, the DOE said it was unlikely Nissan would have made the move to begin American production of batteries and cars without government help. Nissan says the battery plant alone cost $1.7 billion. At the Smyrna plant, Nissan has 300 employees in the highly automated plant, assembling 48 modules of four cells each to make up the Leaf's thin, laminated lithium-ion battery. Like the batteries and now the car itself, the Leaf's electric motors are also made in a Nissan plant in the U.S.

The expansion has created a dilemma for Nissan, as it now has the ability to produce 150,000 Leafs and 200,000 battery packs annually. Even if March's sales doubled for the year, that would still only take a fraction of the plant's capacity. Of course, the vehicle production line can shift to Altimas and Maximas (since they come down the same line), but the 475,000-square-foot battery plant only makes 24 kWh (kilowatt-hour) batteries for the Leaf.

That leads to the question of what Nissan may be planning to do next. Carlos Ghosn, Nissan's CEO, continues to push for higher sales, aiming for 500,000 EVs worldwide by 2015-'16 for Nissan-Renault, compared with the 70,000 Leafs and Renault Zoes currently delivered. While Nissan officials are mum on the details, it would appear that additional models and/or new export markets would be the logical use of the plants' capacities for both vehicles and batteries.

To boost Leaf sales, Nissan has added its lower-cost S model that is bringing in younger buyers, but it also is adding new wheels and leather interiors to appeal to the upper end of the market. At a recent Northern California appearance, Ghosn also touted the Renault Zoe as an example of the new generation of EVs, so that could presage a North American application for that model.

Another part of Nissan's strategy to boost Leaf sales is to expand the charging infrastructure in order to keep ahead of sales and encourage more ease of use of EVs. Brendan Jones, Nissan's director of infrastructure strategy and deployment, said the company is working with partners to triple the number of fast chargers nationwide in the next year. Those chargers are capable of giving a Leaf a full charge in less than an hour.

Edmunds says: Expect to hear more about future Nissan EV plans as the automaker strives to make the most of its U.S. capabilities.

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