Nissan LEAF sales hit a fresh 2012 low with just 370 deliveries in the month of April. That number represents a fall of about 200 units over March (579) and far from a high of over 1,700 mid last year. Unfortunately for Nissan, the media stateside has been more than a little unkind of late, saying that this year’s results show a weakness in demand for the car. A fact that simply is not accurate.
Prior this sales announcement Ghosn has asked the media to have a little perspective on the matter, without elaborating so much as to the why:
“Don’t take one or two months’ sales results in one or two markets,”to make conclusions on this important segment of the market”, while also adding that Nissan does still expect to sell over 20,000 vehicles in the US by the end of the year.
So, with only 2,100 sold through the first 4 months, is Ghosn’s expectation to sell at least that amount for each of the next 8 months (on average)to hit Nissan’s year end sales target realistic? It is…and here is why. Nissan currently allocates production to the US, it is not a function of demand, ie) they can only sell what they ship, when they decide to ship more, they will sell more.
The issues begin with the Nissan LEAF not being a US-specific car. It is a world car, and is being offered in 19 countries. All of which are supplied by one very undersized battery planet, namely the AESC plant out of Zama, Japan. However, this would not explain why Nissan was averaging about 1,000 units sold per month in the US right up to about October of last year, and why the sales have been cut in half since then.
Enter Renault, the ‘other half’ of the Nissan equation. Renault started production of the Kangoo ZE (all electric utility van) late last year, then added the Fluence ZE earlier this year, and then the Twizy just this month. And where are all these battery packs coming from to supply these new offerings? The same AESC factory out of Zama. Demand for packs has become so great for Nissan-Renault have actually subcontracted LG Chem to produce some of the battery packs for the Fluence ZE in Europe.
The takeaway is that currently Nissan-Renault can only produce about 5,000 (LEAF sized) packs per month out of Zama, and that the partnership’s production is divided amongst 4 cars (with a 5th, the Zoe, coming online soon), in over separate markets. Basically, they are supplying everyone and satisfying no one.
The good news for Nissan, and future sales in the US, is that the Sunderland facility in the UK, and the Smyrna factory in the US, while not producing LEAFs, have now both started production of lithium cells, and the stress on battery production in the LEAF supply chain is about to be relieved.
Hi Jay,
News travels fast.
Please explain: You say that all Japan production right now is sent to the US. If that’s true then the poor sales figure this month can’t be because of inadequate supply (or maybe I’m wrong).
Surely Nissan shipped more than 370 Leafs to the US this month. I guess one would have to look at dealer inventories and units shipped (last month?) to get a clearer picture.
I’m just not convinced the sales numbers are because of limited supply. Please convince me since I want the Leaf to succeed.
Thx,
GSB
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Hey George! Nice to see you.
Not really sure about you saying that I said all production out of Japan is sent to the US…I didn’t mean to if that was infered, I’m actually saying the opposite.
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Not commenting on what the demand actually is in the US for the LEAF, but it is still an allocation story right now. The nutshell is that AESC-Zama can (and does) produce around 5,000ish LEAF sized packs per month.
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That production is then divided up between 4.5 models (LEAF, Fluence, Kangoo, Twizy…and some Zoe groundwork), then it is divided up again into the 40+ odd total markets those models fall into, the US being one of them.
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Right now Renault is just firing up its models, and a lot of production is being directed to Europe for them, as well with a lot of early markets for the LEAF just opening up (such as in Norway).
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The only place where it seems demand is being filled close to an ‘as needed’ basis is in Japan itself (their home market), where Nissan has sold about 4,500 so far this year (or about 25% of its overall capacity), that leaves only 3,800ish units to divide up in the other 40 areas the cars are being sold (US again being one of).
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Again, not saying the LEAF can sell 3-4K copies a month in the Us on a consistant basis, I’m just saying the number that represents demand is certainly not as low as 370.
Thx for the response. I guess the statement in the article “Nissan currently allocates production to the US,” is what threw me off.
I am getting the impression though that there are lots of places other than the US that like the Leaf. (Norway). of course the subsidies help. Hopefully with all the countries taken into account Nissan will be able to sell many more in the future.
Get crankin’ on them batteries Nissan!!
Just wanted to say welcome back to the internet Statik, missed reading you!
Me too =)
PS Jay,
I missed kdawg’s staff link.
I am super impressed and will definitely be checking in again.
I really like what Ford is doing in the Hybrid/ electric area.
The Focus seems to be pretty quality with it’s thermal management system like the Volt.
GeorgeS said:
PS Jay,
I missed kdawg’s staff link.
I am super impressed and will definitely be checking in again.
I really like what Ford is doing in the Hybrid/ electric area.
The Focus seems to be pretty quality with it’s thermal management system like the Volt.
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Thanks George,
I know for Lyle and myself (and probably for Marc as well), we have been waiting on a project to come along that we could both get behind (since both the Volt and the LEAF launched and we retired from those ‘duties’). /its been a long wait
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One thing is for sure, it is tricky/difficult to cover (and be responsible) for 95% of the content for one site, and on one specific topic. With InsideEVs, the concept is that it is a collaboration, with each writer/contibutor specializing with what he/she is proficient.
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This way the content is (hopefully) fresh/unique on a variety of vehicles and the technology behind them. Lyle has a lot of history with GM, Marc with Ford, myself with Nissan and 3rd party suppliers (Magna, A123, etc). Theoretically, future contributers will also come on board and will offer additional areas of expertise when this all shakes out, and we can have some kind of forum of people on the ‘inside’.
Both of these Lithium-ion battery plants aren’t due to come online for a number of months, What makes you so confident that they are up and running early?
Hey Statik, great to see you and Lyle teaming up on a site!
Meanwhile, downunder we just wait for any of these great cars to make it here.
Cheers David
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Hi! Glad you found us…we are very new, I am a little surprised people have tracked us down already, (=
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Both the Sunderland and the Smyrna plants are really two seperate facilities, but conjoined. The actually LEAF production doesn’t start until late this year and early next year (respectively), but the battery fabrication components are up and in business. In the case of Sunderland,they have been producing (albeit gingerly) for about 6-7 weeks, with Smyrna’s battery facility just recently completed, and now doing limited runs as well.
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Here is the quote from Nissan/Ghosn on it from last month:
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“Nissan’s UK Sunderland plant began manufacture of batteries in February and will start LEAF production next year, complementing near-term production at the Smyrna, Tenn., plant.”
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http://nissannews.com/en-US/nissan/usa/releases/33a01766-da87-4370-879b-964adb55a47f
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You are likely going to see this really start to translate in sales (and more allocation to the US) once the MY 13s get rolling in July/August out of Oppama. I’m in no way saying the LEAF is going to start selling 4,000 copies a month, every month here anytime soon, I don’t believe the demand is that high…but I think 2,500-3,000 per month to end out the year on MY 2013s is not a stretch.
Thanks for quick reply. Found that same nissannews.com url just a few minutes ago. Interesting…
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No problemo. There is a ton of things to when your just getting set up, ducks in a row, this person doing this, this person doing tha…so lots of hours being put in this week, (=
Unfortunately, now I realize that we have to get in touch with our IT guy to fix the comments/quote functionality. /sigh
Hi Statik! Long time no “see” old friend. Great to find both you and Lyle again posting EV stuff. I guess I have another place to visit now on a daily basis!
You gave a good explanation on the Leaf sales…or lack thereof. I guess Nissan is getting their ducks in a row which is good, although I was a little suprised the factory in Japan doesn’t expand to meet the demand. You would think they would want the business for themselves?
Again, good to see you again.
Any idea how Nissan will manage the logistics of battery and glider production with the 2 being half-way around the world from each other? RORO ships are the current transport method of choice for getting cars around the world – but if those cars don’t have batteries I would think that would make RORO difficult. And shipping heavy batteries to Japan for assembly only to ship them back again doesn’t make much sense, either.
Maybe Smyrma and Sunderland will ship all their batteries to Europe for vehicles there (since batteries would otherwise be shipped there from Zama), freeing up Zama to produce batteries for the LEAF until Smyrma and Sunderland start producing LEAFs of their own late this year?
Battery production in Japan to the world is pretty much bad news all aroung. You have the currency play (which has eased somewhat of late), then the difficulty on the production capacity itself, and then the cost/difficulty to ship of batteries (this is the most consistant of all problems).
Sunderland will/is now beginning to ease the problem in the UK. As will be the secondary LG Chem contract for the Fluence ZE very shortly (which will be the bigger of the 3 models for Renaul…until the Zoe is engaged).