March 30, 2010 / 3:29 AM / 9 years ago

Nissan prices electric Leaf at premium to Prius

YOKOHAMA, Japan/DETROIT (Reuters) - Nissan Motor Co on Tuesday priced its battery-powered Leaf hatchback at about a 50 percent markup to the Toyota Motor Corp Prius in Japan, and near a 30 percent markup over the world’s most popular hybrid car in the U.S. market.

Nissan Motors Co Chief Operating Officer Toshiyuki Shiga demonstrates how to recharge Nissan's Leaf all-electric vehicle during a news conference to announce the price tag for the world's first mass produced electric car, at the company's global headquarters in Yokohama, south of Tokyo March 30, 2010. REUTERS/Issei Kato

Effectively, however, cost to consumers will be lower in both Japan and the United States because of heavy government subsidies in the early years of sales for plug-in battery-powered vehicles such as the Leaf.

The Leaf is to go on sale in Japan and the United States in December.

Prices for the Leaf in Europe are expected to be announced in the coming weeks.

In the U.S. market, federal tax credits will allow consumers to buy a Leaf at about 10 percent more than the cost of a Prius, not including state incentives. State tax credits in California, the top U.S. alternative car market, could reduce the price of a Leaf to $20,280, less than the sticker price of a basic Prius, which is about $23,000.

In Japan, after government subsidies to boost the cars at their onset, the Leaf will be priced about 31 percent higher than a Prius.

Nissan, Japan’s third-biggest automaker and No. 6 in the U.S. market, is counting on electric cars to help it close the gap on rivals led by Toyota, which has won over fuel-conscious customers with the gasoline-electric hybrid Prius.

With a starting price of 3.76 million yen without subsidies, however, the Leaf will still be out of reach for many drivers in Japan.

Nissan Motors' Leaf all-electric vehicle is displayed at a news conference to announce the price tag for the world's first mass produced electric car, at the company's global headquarters in Yokohama, south of Tokyo March 30, 2010. Nissan Motor said on Tuesday it would sell the Leaf electric car for around 3.76 million yen ($40,640) in Japan before government subsidies, disclosing a price for the first time as it aims to take the lead in zero-emission vehicles. REUTERS/Issei Kato

“I’m interested (in the Leaf), but the initial cost is still high, even with subsidies,” said Kiyotaka Shimizu, a 43-year-old cram school teacher.

“I’m afraid the technology is not mature. I would choose hybrid cars at this stage,” Shimizu said as he looked around a Nissan showroom at its headquarters in Yokohama, south of Tokyo.

The five-passenger Leaf is designed to provide a range of 100 miles on a full charge — far less than a petrol car. In the United States, a range of a gasoline car is expected to be more than 300 miles.

While skeptics abound, major automakers are developing battery-run cars for use mainly in urban areas, to meet stricter emissions and mileage regulations being introduced around the world.

Carlos Ghosn, chief executive of Nissan and French partner Renault, has said he expects 10 percent of the world’s auto market will be electric vehicles by 2020, a ratio at the top of industry projections.

Nissan has a capacity to make 50,000 Leaf hatchbacks in Japan for all markets until a new factory opens in 2013 in Tennessee, where the automaker has its U.S. headquarters.

Global Prius sales were about 400,000 in 2009.

MITSUBISHI REDUCES PRICE

Not to be outdone, Mitsubishi Motors Corp followed Nissan’s announcement with plans to slash 619,000 yen off the price of its i-MiEV electric car, to 3.98 million yen ($43,020). The new price will be effective April 1, when Japan’s No. 6 carmaker will begin sales to individuals.

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With Japanese government incentives, consumers would pay 2.84 million yen for the i-MiEV, Mitsubishi Motors said. That is slightly less than the 2.99 million yen ($32,320) that Nissan said the Leaf would cost after state subsidies.

Mitsubishi Motors has been selling the egg-shaped i-MiEV mainly to corporate customers since last July. It aims to sell 4,000 i-MiEVs in Japan in the business year starting in April, and export another 5,000.

Nissan aims to sell 6,000 Leaf cars in Japan from December when sales begin through the end of the fiscal year four months later. In both Japan and the United States, Nissan will begin taking orders for the Leaf on Thursday.

Sales of Leaf in the U.S. market are to proceed at about the same pace, Nissan U.S. sales executive Brian Carolin told reporters on Tuesday. Demand will dictate the number of cars delivered in the Japan, U.S. and European markets, he said.

The Chevy Volt, to debut a month before the Leaf, has yet to be priced by General Motors Co. The Volt is expected have a sticker price of about $40,000 before a $7,500 federal tax credit. The Volt is an extended range plug-in electric vehicle with a small gasoline engine that drives a generator to produce power when the batteries are low.

JAPANESE CONSUMERS

Without the many packs of expensive lithium-ion batteries, Toyota’s Prius hybrid car starts at about 2 million yen ($22,195) in Japan, before state subsidies.

“Everyone would think (the Leaf) is expensive. Of course there are some people who are willing to buy, but generally speaking, it needs to be below 2 million yen for consumers in general to buy,” said Advanced Research Japan analyst Koji Endo.

“The most important point for our cars is zero emissions,” Toshiyuki Shiga, chief operating officer of Nissan, said at a news conference. “Hybrid vehicles still consume gasoline. I want to fully push this sales point.”

Shares of Nissan gained 2.3 percent to 801 yen, while the benchmark Nikkei average rose 1 percent.

Additional reporting by Chang-Ran Kim in TOKYO and Bernie Woodall in DETROIT; editing by Lincoln Feast, Simon Jessop and Bernard Orr

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