Under the leadership of Carlos Ghosn (pronounced "Go-an"), Nissan has been known to be more bullish on the future of electric cars than perhaps any established automaker in the industry. Even in the face of faltering initial sales of electric cars, Ghosn remains optimistic.
As the CEO who successfully rescued Nissan from bankruptcy in 2003, when Ghosn talks, people listen. So when we caught up with the Brazilian-born, multi-lingual CEO of Nissan and Renault for a few minutes at a media roundtable at the 2012 New York International Auto Show, we were all ears. Here's Ghosn's case for investing in electric cars:
Q: You targeted 10,000 Nissan Leaf sales a year for 2011 and 20,000 for 2012. Yet you sold less than 8,000 Leafs last year. Are slow sales of the Leaf and other primarily electric cars worrisome, or just a temporary blip?
I'm very bullish on the [prospects] of the electric car. We can get to these numbers. We're not worried about it.
When we planned for the electric car, with the yen at $110 to the dollar in 2006, we couldn't imagine [a] 30-percent change in the value of the yen. At the moment, the yen at $82 to the dollar has been a real headwind to the sales of the car. So that's why you're seeing a little bit of restraint on our part.
We did not go very aggressively in promoting the Leaf. We have limited the sales to some states. We're starting to sell on a national basis this month. But the cars are not even available at the dealers. They're going to start to be available nationwide at dealers in July. So we cannot say that the Leaf is at full potential in the United States.
The infrastructure is ... also [an obstacle]. We're going to have to be a little bit patient with having the appropriate environment for this part of the transportation network in the U.S.
You're going to see a real ramp up of our sales with the localization of our production in the U.S. (Note: Production in Tennessee starts in August.) We'll see sales above 2,000 [a month] when we start the local production. So yes, I feel very good about this objective.
Q: Does that mean prices will come down when production moves to the U.S., making the cars more affordable?
We are going to lower costs, particularly with the yen at 82 yen to the dollar. Lowering the cost by switching to a U.S. base is very easy when the Japanese base is as cost-ineffective as it is today. Consumers should see the benefit of this cost reduction. Now it's not automatic, it's not, the day you localize the price comes down. But you're going to have a trend toward the car becoming much more affordable, little by little.
Q: Electric vehicle sales have been linked to high gas prices. Are high gas prices a necessary factor for electric vehicles' success?
We did not develop this strategy only speculating on the gasoline price. We still have the emissions problem, which is serious. There is still a regulation going forward as far as fuel efficiency, and you're going to have a gasoline price that will be unmistakably on a trend going up.
When we planned the whole strategy, we were positioning the price for a barrel at $80. As you know today, we are at more than $110. It may go even higher than this. So this is not the only reason for which people move to an electric car, but this is certainly one of the reasons for which some people move.
So we think that all the fundamental reasons for which we launched the strategy are still there. There is nothing that could challenge our strategy into developing [a] complete lineup of zero-emissions cars.
Q: What is the future of hybrids and higher-priced plug-in hybrids versus pure-electric cars in Nissan's lineup? Do you think these types of electrically enhanced drive systems could eclipse the pure electric car in the near future?
We've said we're going to develop a full lineup of electric cars. Fundamentally, I'm seeing really everything pointing to the direction of having a good segment of the market in the U.S. evolving toward the electric car, or I would say [the] mostly electric car. When I say mostly electric car, I'm not talking about hybrids. I'm talking about cars running mostly on electric mode and eventually we install gasoline support. But zero-emission cars, [with] no exhaust pipe, [where] you don't have to go in any way to a gas station, etc., are going to be in my opinion, the core, the heart, of the demand.
We have not been leaders in hybrids; we recognize it. But we have been a fast follower, and today we have enough hybrid cars where we think it makes sense.
On electric cars, we said... we're going to be leaders. But it doesn't mean we're going to exclude other technology. Every time it makes sense, we're going to bring the solution that consumers want. Not in detriment to the electric car, but in complement to electric cars.
At the same time, we continue the keizen (aka improvement) efforts on normal gasoline engine, diesels, etc. The strategy's very clear: downsizing on gasoline engines and diesel, leadership in zero emissions, and pragmatism in hybrids and plug-in hybrids.
Q: Will swappable batteries, such as those offered by Nissan's partner Renault in Israel play a role in electric cars' future?
When you have a new technology coming in, we should not lock ourselves into one system. And our position has been that we're going to develop all the systems. So if we see that countries, states, or cities would like to go to switchable batteries, we have the technology for this. It's not competition; it's complementary. We as an alliance should be able to have all the technologies out there. And then consumers or countries select whatever they want.
Look, we're business people. Business people are very pragmatic. I see our role as enablers, much more [than] as decision makers. Decisions are always in the hands of the political system. But we are here to make sure that there is a solution, and that we can implement the solution.