Nissan Expected to Slowly Boost US LEAF Production to Meet High Demand

AUG 7 2013 BY ERIC LOVEDAY 29

The shortage of Nissan LEAFs will come to an end soon, says Bill Krueger, Nissan America senior vice-president for manufacturing.

2013 Nissan LEAF Gets Assembled In Smyrna, TN....Soon We'll Start Making More

2013 Nissan LEAF Gets Assembled In Smyrna, TN….Soon We’ll Start Making More

As Krueger states, Nissan is currently gauging long-term demand for the LEAF and will use the info it obtains to determine the correct method to ramp up LEAF production in the US.

Production is not expected to increase dramatically, but rather at a slowly growing pace.

The first step in the ramp up is already underway.  Nissan is adding staff at its Decherd, Tennessee factory ahead of launching a third shift there.  Decherd is where Nissan makes electric motors that power the LEAF.  The 3rd shift is expected to be added this Fall.

The next step for Nissan is to determine whether or not a 2nd shift is needed at its battery manufacturing facility in Smyrna, Tennessee.  Nissan will wait until sales results for August are in before determining the right action to take.

As Krueger told Automotive News:

“Sales needs to give us the green light, and we’ll decide in September.  We want to know is this a spurt, or is this long-term?  But we don’t want to ramp up and then ramp back down,  We want to see that it’s sustainable. You don’t want to end up with a bunch of cars out there that you can’t sell.”

If sales hold steady at or near 2,000 unit per month, then Nissan will indeed need to ramp up production as supply of the LEAF is starting to dwindle.

Of note, Nissan is still the only major (excludes Tesla) automaker that produces a pure electric vehicle, its battery pack and its electric motor right here in the US of A.

Categories: Nissan

Tags: , , ,

Leave a Reply

29 Comments on "Nissan Expected to Slowly Boost US LEAF Production to Meet High Demand"

newest oldest most voted

The above indicates they are making motors and battery packs here (TN) but it is not clear to many MNL posters based on % USA content on 2013 LEAF sticker.

Jay’s article talked about LG Chem plant opening soon. http://insideevs.com/lg-chem-battery-plant-now-making-chevrolet-volt-and-focus-electric-batteries/

I’m not sure how much they’re actually making here.

For example there were reports about _trials_ of motor assembly manufacture at Decherd, but I haven’t seen a “Motor assembly production begins at Decherd” report.

Then there’s a difference between manufacture and assembly. Since it’s by value, if they’re producing the mundane stuff in the USA and assembling more expensive imported components it’ll be a low percentage.

The large part of the problem with electric vehicles here in Los Angeles county is that Southern California Edison does not make it easy to get the cheap electric rates. My father, my brother, and me all have electric vehicles. SCE has thrown every road block there is into making cheap rates for the electric vehicle. You have to be a very sophisticated person to get beyond the bureauricratic hurdles. Both my father and I are mechanical engineers and my father has owned his own 50 person company, and I am a project engineer that has managed multi million dollar projects. This gives you an idea of our level of sophistication. Both of us have had difficulty getting through the SCE nightmare. The problem is if you can’t navigate the system you end up paying .35 cents a kilowatt hour. This whole rate issue is why the electric car will get stalled in Southern california. All SCE has to do is increase your baseline rate between 12 midnight and 6am a fix that would take them 10 minutes, but they require a whole new meter and a $2000 pullbox. The only way I got around the issue is I installed… Read more »

It’s really not complicated at all.

You choose between
1) Stay fixed rate:
– PEV charging will cost marginal price
– Solar PV “earns” marginal tiered price on home demand.
2) Stay fixed rate for home; 2nd meter for EV
– expensive up front, gradually get it back as you charge Super Off-peak
– Solar PV “earns” marginal tiered price on one of the meters.
3) Go to Time of Use (there are 2 plans)
– fee up front for meter change(?)
– balance cost of peak demand and EV charging
– consider what other electricity use e.g. laundry can move off-peak
– Solar PV “earns” peak rate price

Throw the numbers into a spreadsheet and work out the cheapest option.

Your soulution is exactally my point. If you buy and ICE car there is no homework. The vast majority of the public doesn’t have the propensity for doinig a large spreadsheet tradeoff study before buying a car. Its just us nerds that get enjoyment by doing those kind of things. My calculations and spreadsheets have taken at least 10 hours of my time, and I am pretty good at it. Take an average person and that may be beyond their ability, and or interest. Buy the way after driving my FFE (focus) I don’t think I want another ICE car ever. I just want the electric company to make it easier to let people buy and use vehicles such as the Leaf.

If you want to do something smart Nissan, lower the price of the Leaf to 23k.
And the next car you make, for f sake, make it aerodynamic, light and pretty. And fast.
Fast acceleration in a light electric car is virtually cost free so it’s moronic not to do it.
Something like 5 seconds. Just to really send shivers through the ICE douches.
And blitz charge which is also easier with a lighter more aero car.
5 minutes for 50km is quite possible, even with existing CHAdeMO.

Well, I’m glad we have people like you here to tell us the solutions to all of these problems. In fact, I agree.. They should lower the price. In fact, I think they should lower the price of the car to an MSRP of $3,999. That out to get them flying out the door. In fact, why not just make them free.

Good one, David. I second.

And while we’re at it Dan, I wonder whether you’ve actually ever taken a ride in a Leaf.

Our Leaf screams by ICE cars when entering the freeway – even on the Eco (slower) mode and with 5 people in. If you do it in the D mode and riding alone, the police might stop you for speeding.

There is no difference in motor power between Eco and D mode – you just have to push the accelerator harder in Eco to get the same result.

We might see entry MSRP prices in the low to mid 20s if and when Nissan starts offering a battery rental scheme here in the US. It’s already a reality in Europe.

This car could really grow in several states do to the low costs of electric power and it could spike if we get hit a oil shock gas prices are still maintaining their relentless growth rate.

They should really start looking at raising the range of this car from 75 to 150 to open it up to far more people in that one of the biggest deterrents right to a lot of people is the small range.

The current range, in absolute terms, still makes the Leaf a great buy for far more people than own it now.

But relatively speaking, now that there’s a mass-market EV with 3x the Leaf’s range, it’s certainly a problem. Even if that car costs 2x as much now, eventually Tesla will make more affordable ones. So I agree with you: Nissan must step up its act on range.

I hoped that Nissan didn’t try to at least phase in range increases of say 10 and 20 miles a charge in the 2014’s models to at least get it to a sold 100 miles range for the 2014.

What I wounder about is if Tesla keeps up their aggressiveness they will most likely hammer this car down in two to three years with their generation 3 car. In that a car with 75 miles of range can’t compete with a car with 200 miles of range for a few thousand more.

Another thing is that Eon Musk has a track record of doing big earth moving projects such as with space X in that they hadn’t of made a moon rocket in over 40 years since the 1970’s and now this summer after a very long time he has plans of testing his company’s own moon rocket. If he says he’s going to do it he might be very well set on it. Also I think if this car was a well selling gas powered truck I really think they could pump up production far faster in that I don’t feel like they are in a hurry with making these cars.

Hi Eric,
I know Nissan makes batteries at plants worldwide….but not sure about the car itself.
Does the TN Leaf plant make Leafs for sale outside the US???
If so then I would think 2000/ mo would be easily attainable.

Yes…Smyrna Tenn produces LEAFs for all of North America (and possibly Central/South America too) though LEAF sales in Canada are miniscule and Mexico starts late this year. Even less are/will be sold in the other Americas. For example, LEAF sales in July in Canada were 42 units.

Eric, are they really making the motors and batteries here for the USA LEAFs? Can you investigate the 2013 USA content % then on the sticker?

Perhaps the stickers were correct when the vehicle was initially homologated late 2012, but as 2013 is essentially a short run, the stickers were not updated?

If the 2014 model stickers say higher USA content% then we can assume that its a case of 2013 stickers not being accurate. If the 2014 model stickers maintain low USA content then we can assume that plant is still commissioning.

Or, Nissan is blending local and import parts as per competitive contestability, which varies upon exchange rates and capacity usage etc etc etc, and they just left the sticker at a conservative value.

Reality check: the sticker on the 2013 Leafs says 85% foreign parts (Japan). So The Smyrna plant should probably be more correctly described as an assembly plant, with most of the Leaf parts (including battery, so I thought) still coming from abroad. Better and cheaper than importing the car whole – but certainly nothing like the Teslas.

Exactly….The 24 kWh battery pack consists of 48 modules and each module contains four cells, a total of 192 cells, and is assembled by Automotive Energy Supply Corporation of Japan (AESC) – a joint venture between Nissan, NEC and NEC Energy Devices.

The Japanese made battery pack/engine is just ‘assembled/put together’ at the Smyrna plant.

Tesla buys their battery cells from Panasonic, and builds their own pack for the Model S.

Ford buys their battery cells from LG Chem and builds their own pack for their EV, hybrids and Energi vehicles.

GM buys their battery cells from LG Chem and builds their own pack for the Volt.

Hmm, I wonder if Ford will also be getting LG batteries from Michigan in the future also now that LG finally fired up that plant?

That’s not my understanding.
I think the cells are made in TN.
Anyone know for sure?

With all respect and thanks to Nissan for taking up the Leaf and making it real, when it comes to volume planning they suffer from all the traditional big-corporate maladies. First they made too few (2011), then too many (2012), then again too few (2013 to date) – and by the time they decide to crank it up, unless the 2014 model’s range is greatly improved they might find themselves again selling far less than expected and struggling to get rid of inventory. The market is moving, not waiting for Nissan to slowly decide. All those new 4-seater EVs, most of them cheaper than the Leaf, are going to be out there nationwide by 2014. The BMW i3 will be out there. The Volt’s getting cheaper – and the Tesla X is looming big on the horizon. What will the Leaf have to offer? The 2013 was a great option when it came out (but alas, too few of them came out). By next year it will not look so great relative to other EVs and PHEVs. Having a Leaf I’m really rooting for this car to continue playing a leading role and increasing sales. But unless they focus on… Read more »

“High demand”? Well, I guess it is higher than last year. It is all relative.

Leaf is right on target with inventory at just over 2k units with demand/sales closely matching. More production won’t create more demand, but cause Nissan to offer discounts/less profit to move the over supply. But clearly what Nissan is waiting to see the impact of the $5k price drop of the Volt. With 38 EV miles and a total range of 380 miles, the Volt can easily be the only vehicle in a household. Where the Leaf, being a 75 mile range EV will be part of a household fleet, as BMW pointed out relating to the 70+ EV mile i3. The other cost saving benefits of the Volt is only one car to insure, saving about $75 monthly(about $900 annually), and no having to pay for a rental for longer trips when the EV and hybrid are combined into one vehicle. So yes, Nissan will be holding off on ramping up production. But GM on the other hand, has pushed inventory over 6,600k units as of today, with the expected lower lease coming after the $5k price drop that should drop to $229/mo or less. Clearly, GM is not about to allow the Leaf(11,703) to outsell the Volt(11,643) for… Read more »

As a LEAF salesman in Los Angeles who has sold over 400 LEAFs, I have a pretty good idea of volumes and demand. If Nissan is waiting to see how August demand looks before ramping up, I hope they consider that I have none of the cars that are in highest demand, therefore my sales numbers will not indicate demand. Last month, we sold slightly less than the month before, but that was due to not having inventory. I’m pretty disgusted about how slow Nissan’s been in ramping up the S and S/QC. The latter is by far the most desirable trim level, but I’ve only had two in the past two months. That’s the problem from my perspective.

Paul, thanks for your insider insight!

That indeed has been my impression. But Nissan has repeatedly made wrong production-volume calls on the Leaf so far, and I’m afraid this will continue… also, this “wait a sec, we’re ramping up production just now” news blip has been a recurrent story for several months now, with no evidence to support it on the ground.

Again, at this point in 2013 what they should be doing is looking ahead to the 2014 and making sure they have an attractive model for you to sell. Most likely, this also means making the equivalent of S/QC a standard trim rather than a special-order one. But more importantly range. Every mile matters at this point and if the 2014 comes out with the same range as 2013, Nissan will be playing catch-up again like in 2012.

I have to think that Nissan is intentionally limiting sales of the LEAF S model to push people to the higher prices SV / SL where they make more money.

It’s quite possible that the S is a loss-leader to get people in the door. I know they’ve said that they didn’t expect the S to sell all that much, but that was months ago and surely by now they should be able to adjust production to match.

Or perhaps because they _are_ still production rate constrained – it doesn’t make sense to build more LEAF S models since with their current mix of production they are still selling all the LEAFs the can – and once production rate goes up they will simply increase the number of LEAF S models they produce.

Instead of dropping prices on leaf, I think Nissan should be more creative about getting additional dealerships to start pushing the leaf.

For instance, they could experiment with dealer holdback. Currently, Nissan hold back is 2.8%, which is approx $700 for each leaf sold. Sort of an invisible profit to the dealer.
What if they were to offer a dealer incentive for every 5th leaf sold? Say something that is 5x the incentive that they would be willing to provide for an individual sale.
Maybe, that would get some dealerships off the sidelines and trying to sell leafs.
They might find other surprise markets like Atlanta.

Why should Tesla be the only one allowed to disrupt the standard model of business for dealerships?

Are the Leaf and Tesla really the only EV’s with US built batteries and motors? What about the Ford Focus Electric? Or even the Chevy Volt, if you consider it to be an EV.

GSP