I don't really understand Nissan's Strategy

[edatoakrun]

...I don't understand the business strategy of investing tens of millions of dollars into a technology without also making a modest additional investment in the infrastructure needed to make the success of the product possible...I am mystified by Nissan's approach.

Welcome to the club, which was founded ~when Nissan first introduced the LEAF.

As I commented then:

http://www.mynissanleaf.com/viewtopic.php?f=11&t=2374" onclick="window.open(this.href);return false;

I Want my (fast) DC!

Fri Jan 14, 2011 9:59 am

I do not understand Nissan USA's apparent reluctance to contribute to the development of the public fast charge infrastructure.

Billions of dollars have been invested by Nissan in designing and producing the LEAF. IMO the design and concept is far superior to any of the "plug-in" or ICE "conversions" that will enter the market in the next few years. But there is currently a glaring failure in the LEAF concept to any potential American buyer. Nissan is allowing it's EV competitors to beat it up over "range anxiety" and slower level 2 charge times.

The total cost of a DC fast charger installation is reported to be only $5,000-$25,000, before various subsidies and tax credits. Why Is Nissan not making any effort to promote DC infrastructure development? This is by far the most cost-effective way to increase the range and practically of the Leaf to current (any of you owners even used a DC charger yet?) and future drivers.

EV drivers do not need fast charging at home or at the dealer. They need to be able to get an occasional fast charge on the road BETWEEN destinations...

And more recently, on the same thread:

Thu Apr 16, 2015 11:35 am...I have little doubt that ~10 years from now there will be functional and economically self-supporting DC charge stations along many highways in the USA.

You will know the DC is reliable, because it is a requirement of the proprietor's business model, that there will be a charger available and working to dispense fuel to any vehicle, which gas station operators learned ~ a century ago.

And almost certainly (such is the case at most gasoline fuel stations located on intercity routes today) the primary profit source will not come from fuel sales, but by selling other product (food and drink) at the same location.

The problem is, there are not enough BEVs on the road yet, to support investment in public DC stations.

So, I am suggesting Nissan, which has the largest stake in making public DC work, take the initiative to establish reliable DC stations not nationwide but only in those few locations where they will get the most use, where the subsidy cost is lowest, and where the interval until Self-sufficiency is shortest.

 

[mjblazin]

Between the home charging stations, long range and existing Supercharger stations, it wouldn't be that huge a problem if Tesla sold a lot more cars than they added new stations.

.

Apartment dwellers have always been a problem for the electric car industry in general. This problem is not specific to Tesla. If you don't have garage charging, then you would need access to a local Supercharger or level III charger with Tesla's CHAdeMO adapter.

Building a small amount of chargers in a national network does not seem a rational decision for a company planning to sell hundreds of thousands of cars except as a publicity stunt.

Condo/apartment dwellers like myself with medium or short commutes can live quite well off the public network. The average commute in Dallas Fort Worth, a region of soon to be 10 millions, is about 20 miles. That is a lot of people that can charge every other day or third day, particularly if the EV is the second car. EVs do not have to eradicate ICEs. They just have to make a big dent in their numbers and use. A metro centered network that Nissan implicitly supports has the benefit of being a cost benefit calculation. Wasting time putting chargers in spots into places similar to the one where Cary Grant got off the bus in North by Northwest may make you a visionary, but it hardly makes business sense.

 

[desiv]

However, having an electric car with additional range does little good if there is not a charging infrastructure to support it.

The opposite is probably true actually.
As has been mentioned, when you have enough range to get people comfortably to work and back, you don't "need" a big charging infrastructure.

However there are several issues with that.
1: Americans who can make the commute easily with the current range STILL want more range to feel comfortable. I think Nissan underestimated how much "extra" range was needed for people to feel comfortable with their cars.
2: People who don't own their own homes. Renters/apartment dwellers. They are some of the best candidates because the frequently have shorter commutes.. But this is where you NEED a better charging infrastructure..

That being said, I do think Nissan sees EVs becoming prominant in the future.. But I think people are overly optimistic about what "future" means here.. I think Nissan sees this happening, but not in 5 to 10 years. They want to be in the position to lead, but they don't want to pay for the infrastructure that will benefit everyone else...
(Yes, Tesla has "opened" the tech for their SuperChargers, but doesn't mean any car company can add a Tesla socket and their cars can use the SuperCharger network for free.. Tesla is paying for Tesla right now..)

Nissan did try to improve the situation with more chargers at their dealers. But mostly what this did was to expose some of the problems with dealerships.. ;-) You'd think dealers would have to be pretty dumb to mess up this good-will advertising/marketing opportunity. Well, they did.. ;-)

I don't think Nissan is in this to sell 200,000 EVs in 2015. (Although they wouldn't mind)
But when the market starts to kick in (5, 10, 15 years), they are planning on being ready to take advantage...

The problem I see there, is that frequently the "leader" in a new market loses.. Because it's actually not usually as difficult for a competitor to "ramp up," letting the trailblazers absorb the initial costs.
And this is one of the reasons Nissan is making sure not to do something like putting a LOT of money/resources into a charging network that will benefit everyone..

And I know there are a lot of true-believers out there, but it still remains to be seen if Tesla can succeed on a large scale.

desiv

 

[Nubo]

I don't see any scenario in which electric cars "replace" ICE vehicles in our life time. At best, they will gradually catch on and become established as a viable alternative for the average driver.

Well, maybe I plan on living longer. :lol: But I do fully expect to live to see the day when gasoline cars are relegated to museums and enthusiast clubs. Batteries continue to improve and cost continues to decline. At some point along those curves, buying an EV becomes a clear economic choice.

 

[LeftieBiker]

I don't see this being ZEV focused for Nissan.
If it were, they would only be selling in ZEV states as other compliance vehicle

As I understand it, Nissan gets the credits no matter where they sell the vehicles. They *have to* sell them in CARB/ZEV states, but profit from selling them anywhere.

 

[TomHuffman]

The longer the range the less infrastructure is needed.

Many people that travel cross country take an airplane. That is the target market.... enough range for around town or to the airport.

That ability is served already by the 84-mile Leaf. If that were the sole market, then there's no point to releasing a car with double or more the range. I think you substantially underestimate what people would like to do with their electric cars if they only could.

I have not underestimated anything. Nissan filled a niche and will probably expand the range. It will come at a price. 400 mile range for $20,000 is what we want. Not happening as much as that is what we want.

If you believe, as your post indicates, that the only thing EV owners want is a vehicle to travel "around town or to the airport" then, yes, you most certainly have underestimated the demand from EV owners.

There are basically three types of trips: local, regional, and long distance. The current Leaf serves the first type of trip quite well. Very few "local" trips are more than 35 miles from home. That's just not enough. People rather often need to take regional trips of 50-80 miles from home. Furthermore, most folks will have a need once or twice a year to take a long distance trip (not necessarily cross-country). The Leaf's current charging infrastructure in most cases does not support regional trips and it certainly doesn't support long distance trips. Regional trips are supported in some markets (e.g. Atlanta, Washington state, or S. California). That leaves a huge portion of the country unserved.

 

[TomHuffman]

However, having an electric car with additional range does little good if there is not a charging infrastructure to support it.

The opposite is probably true actually.
As has been mentioned, when you have enough range to get people comfortably to work and back, you don't "need" a big charging infrastructure.

However there are several issues with that.
1: Americans who can make the commute easily with the current range STILL want more range to feel comfortable. I think Nissan underestimated how much "extra" range was needed for people to feel comfortable with their cars.
2: People who don't own their own homes. Renters/apartment dwellers. They are some of the best candidates because the frequently have shorter commutes.. But this is where you NEED a better charging infrastructure..

That being said, I do think Nissan sees EVs becoming prominant in the future.. But I think people are overly optimistic about what "future" means here.. I think Nissan sees this happening, but not in 5 to 10 years. They want to be in the position to lead, but they don't want to pay for the infrastructure that will benefit everyone else...
(Yes, Tesla has "opened" the tech for their SuperChargers, but doesn't mean any car company can add a Tesla socket and their cars can use the SuperCharger network for free.. Tesla is paying for Tesla right now..)

Nissan did try to improve the situation with more chargers at their dealers. But mostly what this did was to expose some of the problems with dealerships.. ;-) You'd think dealers would have to be pretty dumb to mess up this good-will advertising/marketing opportunity. Well, they did.. ;-)

I don't think Nissan is in this to sell 200,000 EVs in 2015. (Although they wouldn't mind)
But when the market starts to kick in (5, 10, 15 years), they are planning on being ready to take advantage...

The problem I see there, is that frequently the "leader" in a new market loses.. Because it's actually not usually as difficult for a competitor to "ramp up," letting the trailblazers absorb the initial costs.
And this is one of the reasons Nissan is making sure not to do something like putting a LOT of money/resources into a charging network that will benefit everyone..

And I know there are a lot of true-believers out there, but it still remains to be seen if Tesla can succeed on a large scale.

desiv

I really hope that Nissan does not take the view you express here seriously. If the EV manufacturers insist on relegating their cars to the local commuting role only, then they are doomed to fail. Even a superficial understanding of the American car-buying public shows that the public wants cars that serve a wide variety of roles--some of which involve long range travel and regional travel--beyond simply going to and from work or going to the local supermarket.

 

[smkettner]

If you believe, as your post indicates, that the only thing EV owners want is a vehicle to travel "around town or to the airport" then, yes, you most certainly have underestimated the demand from EV owners.

You're missing the point. Nissan may have misread the market not me. I was promised 100 miles when I signed up in April 2010 to be one of the first.

The LEAF came in very short of even their (Nissan's) own promises. I know people want more range including me.
For myself I was lucky enough to trade for a RAV4-EV. In contrast... range on the RAV has exceeded promises.
Still could use more at times.

 

[TomHuffman]

Building a small amount of chargers in a national network does not seem a rational decision for a company planning to sell hundreds of thousands of cars except as a publicity stunt.

Condo/apartment dwellers like myself with medium or short commutes can live quite well off the public network. The average commute in Dallas Fort Worth, a region of soon to be 10 millions, is about 20 miles. That is a lot of people that can charge every other day or third day, particularly if the EV is the second car. EVs do not have to eradicate ICEs. They just have to make a big dent in their numbers and use. A metro centered network that Nissan implicitly supports has the benefit of being a cost benefit calculation. Wasting time putting chargers in spots into places similar to the one where Cary Grant got off the bus in North by Northwest may make you a visionary, but it hardly makes business sense.

I have read your first sentence multiple times and I still don't understand what you mean. If you mean that a nationwide network of superchargers serves no real value, you are simply ignoring what virtually every Tesla S owner has reported and which has been reported in the media countless times, which is that the Supercharger network was a HUGE factor in their purchasing decision and subsequent product satisfaction. If you mean that planning to "sell hundreds of thousands of cars" is consistent with a car/charging infrastructure that supports local commuting only, then I really don't think you understand the U.S. car market very well.

Having a Supercharger in a remote site makes a tremendous amount of sense if that site is in between two other sites that either have huge populations or are heavily visited. Just for an example, think of a remote desert Supercharger site in between LA and Las Vegas. Do you really think such a site makes no business sense? Tesla has a Supercharger in Barstow, CA--probably not far from where the North By Northwest scene was filmed. Do you think it is there just for publicity or to serve the commuting needs of Barstow's 23,000 residents? Or, to take another example, why do you think that Tesla has superchargers near Lebec, CA (pop. 2,010) and Coalinga, CA (pop. 13,380)? It certainly isn't to serve the Lebec and Coalinga populations. They exist to serve the needs of those traveling from Los Angeles to San Francisco.

 

[TomHuffman]

It's been said before, but I'll say it again: the target market for EVs is as a commuter vehicle in a 2-car (or more) family with an attached garage. Commuter vehicles don't need charging stations all over the place since everyone has one in their garage. That target market will be better served by a true 100 mile range (cold/hot/highway/whatever) EV, which we assume will be the Leaf Gen 2 (or whatever you want to call it).

Yes, IF all you want a car for is local commuting and IF you have 2 cars and IF you have a private garage, then the Nissan strategy is just fine. I have had my Leaf for 2 years and I find the existing range adequate for that role. Another 20 miles of range might be nice for really cold days, but that is a small point. The much, much larger market consists of those who fall somewhere outside of the 3 conditions you define. For example, I have a private garage, but I don't want to have to buy a second car to serve my non-commuting needs. Do you really think that is unusual?

 

[TomHuffman]

...I don't understand the business strategy of investing tens of millions of dollars into a technology without also making a modest additional investment in the infrastructure needed to make the success of the product possible...I am mystified by Nissan's approach.

Welcome to the club, which was founded ~when Nissan first introduced the LEAF.

As I commented then:

http://www.mynissanleaf.com/viewtopic.php?f=11&t=2374" onclick="window.open(this.href);return false;

The problem with the current Leaf is that even if there were a perfectly satisfactory national charging infrastructure, the vehicle's range makes long distance travel impractical. Very few people on a 500-mile trip would want to stop and charge every 50-75 miles.

The charging problem becomes much more acute when the Leaf II arrives, because the greatly increased range now makes long distance travel a practical option, if ONLY there were the charging infrastructure to support it.

 

[TomHuffman]

As for the OP, your lack of knowledge of Nissan's plans doesn't mean Nissan lacks those plans. It just means Nissan has not shared them with you.

My personal hope is that Nissan chooses, with the second generation Leafs, to join forces with Tesla.

Boom! Instant nationwide, well planned out, convenient, supercharger network at more than double the speed of the current ChaDeMo chargers.

I would be extremely pleased if Nissan took the course you suggest here. I have seen no evidence that they intend to, but I would love to be proved wrong.

 

[TomHuffman]

The longer the range the less infrastructure is needed.

Many people that travel cross country take an airplane. That is the target market.... enough range for around town or to the airport.

That ability is served already by the 84-mile Leaf. If that were the sole market, then there's no point to releasing a car with double or more the range. I think you substantially underestimate what people would like to do with their electric cars if they only could.

The problem is the so-called "84 mile" Leaf really doesn't have an 84 mile range for a lot of people. People in cold climates are lucky to get half that especially if their Leaf doesn't have the hybrid heater. Same with those who have significant elevation changes during their drives, or drive on highways in which the posted speed limit is treated more as a suggestion than the law. Many people who already have EV's have already stated that they would like more range. Even though my commute only uses a couple of bars each way, I would appreciate the convenience of a larger battery so I don't have to sit in front of Google Maps and PlugShare trying to plan the most power-efficient route and the available charging stations along the way to get to, say, Disneyland from my house. It's that lack of spontaneity that turns many off to EV's.

If it was as simple as providing DCFC's everywhere, we could just lessen the battery size to say 30 miles and just make everybody quick charge often. The benefit would be a cheaper car since the battery will be smaller, plus a lighter car which means it could go further on each kWH. But people won't find that acceptable at all.

A lot of people "want their cake and eat it too" meaning they want the cheap refueling of an electric but they also want to drive it at 75 MPH with the heater cranked up to 80 degrees in subzero weather for at least 60 miles. Or they want to be able to take that spontaneous "150 mile round trip" drive even if it's something they may only do once or twice a year. It's that form of range anxiety that is keeping some folks from adopting EV's, even though in theory it should work for them the overwhelming majority of the time.

Some problems are fixable and others aren't. Electric cars will always lose significant range when driving in extreme cold or at very high speeds. That is a design limitation that I think EV owners will have to live with. Having a 150-mile Leaf without a nationwide charging infrastructure solves the problem you describe of local drivers who want to live without range anxiety. What it would NOT solve is the problem of your neighbor who wants to drive to San Francisco, rather than Disneyland. For that drive you need a couple of rural quick chargers on the I5.

 

[desiv]

I really hope that Nissan does not take the view you express here seriously. If the EV manufacturers insist on relegating their cars to the local commuting role only,.

Ah, but that's not totally what I totally meant to say. I was answering a specific question about a specific time..
What I meant to say was that Nissan was taking that view "for the Leaf now," because you have to start somewhere with new technology..

Battery technology will improve... Over time..
But it isn't cost effective currently to release a car with LOTS of range and try to get it to appeal to a larger audience (not just people with a lot of extra spending money).

That initial tipping point is what is needed...

When it's cost effective, Nissan (and others) won't care about range too much.. Kind of like now with an ICE car, whether to have an 8 or 10 gallon gas tank. Not a major decision... But now, with the cost of batteries, that is a HUGE decision.

Nissan was looking at the car and market of 2011 and saying that the range they can provide at the price point they wanted to hit should be good enough for a large market..

And technically, that was true. But many in that market still were uncomfortable with it..

Obviously, as battery tech prices drop, range goes up...

That said, the question is still out there, what is the real "market" for charging stations if most people can charge at home with longer range cars?
Look at it this way, if you could fill your ICE cars tank at home, how often would you stop for gas while out? Especially if it continues to cost much more to do so out?
Yes, there would be times, but nowhere near as much as now.
It's a different market.

desiv

 

[DanCar]

I don't see any scenario in which electric cars "replace" ICE vehicles in our life time. At best, they will gradually catch on and become established as a viable alternative for the average driver.

Do you own an electric car?

 

[keydiver]

I am currently leasing a Leaf. When my lease is up I currently plan to purchase a Tesla Model III.

 

[forummm]

Between the home charging stations, long range and existing Supercharger stations, it wouldn't be that huge a problem if Tesla sold a lot more cars than they added new stations.

Actually this is the Achilles heal of tesla IMHO. Right now it's limited numbers, expensive, which almost guarantees every model s owner has charging at home (garage). Extend this now to a car in mid-thirties, in a city where a great number of people don't have a garage and therefore no personal charging station. It's success woukd be a disaster. Right now I'm Maryland, which is fairly dense, there are not many charging stations in most areas, and much fewer still tesla superchargers.

So between finding, driving to, and competing for chargers having 10x or 20x more tesl as on the road could be problematic. A tesla supercharger with 4 stalls can't even serve 8 cars/hour.

I think this problem--one of selling too many cars too quickly--is one that Tesla would love to have. They can throw some money at doubling or quadrupling infrastructure in limited areas if they need to. If they have tens of billions in sales, millions are a rounding error.

 

[forummm]

Nissan wants to sell enough Leafs to earn the company necessary ZEV credits. They don't, like Tesla, want to change the way people drive. They especially don't want to replace ICE vehicles with EVs. Once you understand this *very limited* commitment to electric vehicles, it's easier to understand.

I don't see any scenario in which electric cars "replace" ICE vehicles in our life time. At best, they will gradually catch on and become established as a viable alternative for the average driver.

I must say that your speculation about Nissan's motives at least has the virtue of explaining their behavior.

I absolutely expect electric cars to replace ICE vehicles in my lifetime--meaning EVs are the majority. I (30's) may be a lot younger than you though.

 

[epirali]

Between the home charging stations, long range and existing Supercharger stations, it wouldn't be that huge a problem if Tesla sold a lot more cars than they added new stations.

Actually this is the Achilles heal of tesla IMHO. Right now it's limited numbers, expensive, which almost guarantees every model s owner has charging at home (garage). Extend this now to a car in mid-thirties, in a city where a great number of people don't have a garage and therefore no personal charging station. It's success woukd be a disaster. Right now I'm Maryland, which is fairly dense, there are not many charging stations in most areas, and much fewer still tesla superchargers.

So between finding, driving to, and competing for chargers having 10x or 20x more tesl as on the road could be problematic. A tesla supercharger with 4 stalls can't even serve 8 cars/hour.

I think this problem--one of selling too many cars too quickly--is one that Tesla would love to have. They can throw some money at doubling or quadrupling infrastructure in limited areas if they need to. If they have tens of billions in sales, millions are a rounding error.

Actually I don't think so. The problem of infrastructure isn't just money/cost, but scale. Again think of every gas station you see today. Now imagine if you needed something like 10x that capacity if all cars were electric (time to charge is roughly 10x for similar range). That is the fundamental problem. There is NO WAY any single company (or even groups of companies) can put the money/resources into that. You are taking for granted that there was a very large amount of profit incentive in traditional fuels that have paid for the infrastructure you see today.

Electricity as a business has no such incentives, and Tesla just isn't ever going to replace that. But they don't want to talk about that. There is a bit of hand waving going on that "somehow" this will all work out when they start selling millions of cars at $35K. But it really won't. And right now Tesla has a very large premium on each car that will no longer be there at $35K, even with the economies of scale.

So where will the money for the infrastructure come from? Honestly I can not see any private business making any money from charging unless they charge way too much, which is in itself a huge disincentive. If a 200 mile charge will cost say $10 (which still isn't enough to run a charging business), you are getting roughly a cost as if gasoline was $6 or up per gallon. How is this ever going to fly from a business viewpoint?

 

[DanCar]

I absolutely expect electric cars to replace ICE vehicles in my lifetime--meaning EVs are the majority. I (30's) may be a lot younger than you though.

Here is a roadmap I dreamed up:
First some history:
In 2010/2011 the first mass market electric car was released which was the Leaf. Price was near $35K. Two years later price was dropped to $30K.
End of next year or 2017 we will will see a number of 150+ mile range electric cars. Price again will be $35K+.

If we see the above trend repeat itself then:
1) 2019 we will see a price drop of 150 mile range cars drop below $30K.
2) 2021/2022 we will again see a doubling of range in the $35K price category. 300 mile range cars.
3) 2023 will will see 300 mile range cars drop in price to $30K.

Unknowns:
1) When will fully electric SUVs be available?
2) When will the mass market adopt electric cars? Poll at G+