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Taking a Nissan Leaf Out for a Spin
After five years of waiting, I finally got to drive the dream car of the future, the 2011 all-electric Nissan Leaf at the San Francisco auto show. Pulling a few strings with CEO Carlos Ghosn landed me a VIP test drive. It was one of the most surreal driving experiences that I have ever enjoyed, a lot like going on a new ride at Disneyland on opening day.
In the ultimate bit of cheek, Nissan set up a driving course defined by orange cones inside a 43,000 square foot ball room. Five cars zipped around the track like large remote controlled toys. The point was to show you that yes, this emission free vehicle can operate safely indoors. There is no tail pipe.
This is not souped up golf cart. After comfortably sliding my 6’4” frame behind the wheel, I asked the rep to pack the car so I could give it a real test. Three farm boys from Tennessee, real heifers, dutifully piled in. It made no difference; The car took off like a Porsche.
The Leaf has a 100 mile range, can be recharged at home in eight hours, or at a public parking lot in 30 minutes. A GPS system constantly displays your remaining range on a real time map, as well as the locations of the nearest charging stations. If you run out of juice on the freeway, Nissan offers free roadside service with an immediate recharge. With a 600 pound lithium ion battery lining the bottom of the chassis, it has tremendous stability, and corners like it is on rails. The battery comes with an eight year warranty and a ten year life.
My local utility was there cheering from the sidelines. PG&E is offering a special Plug-in-Vehicle rate of only 3 cent per kilowatt hour rate from 12:00 am to 7:00 am, compared to the standard top tier rate of 40 cents per hour, a 92% discount. That means the leaf’s 100 mile drip will cost me 72 cents. This is the same as buying all the gasoline I want at 15 cents per gallon! In other words, the fuel is basically free.
When I asked the chief engineer about maintenance costs, I got a blank stare. Then he answered in a deadpan fashion, “there is no maintenance”. During the first 100,000, the only expenses will be for brake pads and tires, as the 107 horsepower electric induction engine only has five moving parts.
You can get all of this for $33,000, which after a federal subsidy of $7,500 and a California state subsidy of $5,000, nets out to $20,500. Giveaway price, free fuel, free maintenance. Hmmmmm.
The car will only be sold initially in eight states, and I will be one of the first to get one in California. The entire US production run of 25,000, or 50,000 globally, has been sold out for next year, so you will have to wait until 2012 to get one. Nissan plans to ramp production in Tennessee up to 250,000 by the end of 2012, or 500,000 globally. Carlos Ghosn thinks electric cars will account for 10% of the global car market by 2020, or some 5 million units.
There are broader implications for the stock market with all of this. When Nissan Motors (NSANY), General Motors (GM), and others launch their advertising campaigns next year, I think there will be a media frenzy. Take a look at the share price of Ford Motors, and you know the industry has the wind in its sales, and an electric car boom could build it to hurricane force.
Think about what will happen next. What will these cars cost when the price of oil doubles, which I expect in the next five years? They should go through the roof. The production ramp up will, at the same time, cause economies of scale to kick in and costs to plummet. So Nissan will be working the income statement from both sides. That is what Ghosn is betting the company on.
Bottom line: For your longer term portfolios, buy Nissan shares on dips, and cash in on the hype.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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With brown outs already in the most populous parts of the country,
where do you think this extra power will come from. It won't be free
to increase output so count on all your electric bills to increase.
Think, why would a power company give you a break to charge your vehicle.
I haven't gotten a break on my home power bill before.
You'll get your electricity from nuclear power stations. If you haven't started to ramp up your production, get to it :o)
In the longer run, novel fusion technology like Travelling Wave (see TerraPower) and fusion will lower cost dramatically. Also, nanotechnology will likely succeed in developing cheap and efficient solar panels. The cost of energy should decline linearly till it gets very very cheap, granted with some bumps along the road. The is a LOT of energy all around us, we just need to convert and store it!
The initial hits of herion are free as well.
My question is how are gubbermints around the world going to replace the tax revenue they get from each gallon/litre of gasoline sold? In the UK 75% of the cost of a gallon of gasoline is made up of various taxes to pay for the utopian welfare state they have created. The US is not much better, close to half the cost of a gallon of gas goes to local, city, state, federal taxes.
I smell a VAT (Value added tax) coming folks!
They will install a mileage meter on the car, and you will just have to stamp your ticket.
- Good point. Maybe that is another reason why Cap-and-Trade is being pushed: carbon taxes on electric production.
OK, first let's note that change is threatening, and the first motorcars were met with derisive cries of "Get a Horse!"
Second, electric cars were around at the dawn of the automotive era (Jay Leno has one that's more than 100 years old) and they were left in the dust by gasoline-driven ones for a number of reasons, not all of them having to do with any inherent superiority in using gas-driven vehicles.
Third, batteries, electric motors, control systems and charging systems have been quietly getting better lo these hundred years. Larger batteries and oversized starters provide almost as much benefit in a mild hybrid as you get in a full Prius-style hybrid.
Fourth, for one technology to displace another entrenched one it typically must show a tenfold benefit.
Fifth, anything that will store a lot of energy is also likely to burn, and lithium ion batteries are no exception. It's an engineering problem, not a disqualification.
Sixth, right now there is no such thing as a jerry-can of electricity for those whose electric cars go dead.
Seventh, smart buyers are going to take a look at total life cycle costs, as well as flexibility of the vehicle in daily driving and for long trips.
What all of this adds up to is all-electrics as commuters, with flex-fuel plug-hybrids being the choice of the masses.
I see the Leaf as a modest success and proof-of-concept, the harbinger of an additional choice for certain consumers rather than a revolution.
Anyhdrous ammonia as a motor fuel would be an attainable revolution.
THINK Digital Camera's, Kodachrome and darkrooms. Look for tipping points and correlated indicators. Have fun.
is there a list anywhere of per state subsidies?
The assumption is that fuel prices will continue to increase perpetually. This is as fundamentally incorrect as the assumption that real estate prices will increase perpetually and for the same reason.
What sets prices of all goods is the ability of output to support input costs. If the return on the use of inputs is less or equal to the cost of the inputs the result is bankruptcy of the input using entity.
Our entire 'waste- based' economy currently costs more to operate than it returns. This is why it's slowly falling apart: not credit overhangs, not moral hazard, not currency or F/X imbalances, a lack of a gold standard or any other reason.
As energy input prices rise either nominally or measured against output the ability of output to pay decreases. Funds allocated toward fuel are allocated away from other remunerative uses such as wages. The consequence is decreasing final demand and falling prices for all goods including fuel.
Right now, the cost of bringing new petroleum to market is increasing faster than the ability of the economy that uses the petroleum to pay for it.
Since the 'marginal barrel' sets the price for all, when the cost/support levels intersect there will be no new petroleum put onto the market. Prices will spike until what credit remains viable within finance is swept away ... then crash. Fuel will become dirt cheap but nobody will have any money! As was the case in 2008, auto makers will fail along with airlines, aircraft manufacturers and other fuel users. Because the cost of new petroleum will be outside the ability of users to pay the resulting shortages will be permanent.
The cost level where 'demand destruction' occurs is approximately 5% of GDP. This has been the case since 1973. Out current energy price level/GDP is over 5% which is the cause of distress in economic regions: USA, China, Japan and the Eurozone. Oil above $80 renders most business activities unprofitable, oil prices decline as a consequence of business distress and failure. This is not a virtuous cycle for business activities.
Note that the price feedback cycle is within business and has nothing to do with the pump price of fuel. Customers can afford the gas but cannot afford the second home, a new car, jet ski, or additional consumption needed to propel economic 'growth'.
High oil prices are dependent upon credit expansion. Credit cannot expand because high real energy prices make business activity unprofitable. It is business activity which generates new credit. Without new credit, existing credit becomes unserviceable and the outcome is deflation, which is taking place in the OECD.
Electric cars are subsidy dependent; all are internally subsidized by the manufacturers who must sell several gas- guzzling SUVs and giant pickup trucks for every electric car sold. Other subsidies are mounted on top of manufacturers' internal subsidies.
Electric cars are cheap theatrics, the only solution to the onrushing economic decline is conservation and credit restructuring. Effective conservation means ending 'economy- of- scale industrialization and all personal auto use.
"SFV is an insane, communist liberal anti- American! No way will I give up my car(s)! I love my carz!"
"Please! Tell me he's wrong! Make the boogeyman go away! Mommy!"
Guess what, suckers! The economy will continue to unwind until the auto industry is kaput along with the fossil fuel/nuclear energy industry. Energy waste is a self- solving problem as is drug addiction. We are all living the solution right now! There is nothing anyone can do to change this, including Nissan and its fleets of apologists.
Have a nice day.
Gee, I'm glad somebody has all the answers. I was wondering who it was.
U.S. natural gas reserves increased by the most in history last year, and crude reserves also rose,U.S. net proved natural gas reserves rose 11 percent, or
28.8 trillion cubic feet (tcf), in 2009 to total 284 tcf,
underscoring the dramatic impact that new gas pumped from shale
rock formations is having on world energy supply.
U.S. net proved crude oil reserves rose 9 percent, or 1.8
billion barrels, to 22.3 billion barrels in 2009. Texas saw its
proved oil volumes rise most, by 529 million barrels, or 11
percent.
http://af.reuters.com/article/energyOilNews/idAFN3029057520101130
http://graphics.thomsonreuters.com/F/11/US_NGRESERVES1110.gif
Bravo. I'm glad you said solution is conservation and not efficiency. We must use less (of everything).
Beautifully put!!! You have nailed it and "it" has come home to roost. As I have said before, Mr. Bernanke can print all the dollars he likes, but he cannot print oil.
The EPA rates the Leaf for a range of 73 miles. This will vary depending on hills, charge, temperature, weather, load, traffic, etc. Could be more, could be less. Expect to see some Leafs dead at the side of the road. Driving could be a fun and challenging game called can you reach your destination and return?
I see a new video game coming soon: Dodge the dead leafs.
Get your practice skirting around all the leafs that suddenly and unexpectedly stop in front of you. Most especaially good for you bikers out there. ;-)
I'll keep my Ford Lightning, thanks.
It's a good step forward, but 100 miles isn't much to get excited about. It would be funny to see these things running out of juice in traffic all over NYC though. And relax MHFT, it's a short distance electric car, it's not like you have early access to Scarlet Johansson's vag.
So all we need to do is plug our wonder car into the zero emissions grid?
And all of that wonderful electricity comes from where exactly?
Let's see, burning coal, or bunker fuel, or at best natural gas to power generators....
If it aint hydro, it aint emission free, simple as that, unless of course you assume that spent fuel rods aren't an emission....
if you are simply worried about emissions in general, electric cars still win, but where they win real big is giving us clean air in the areas we congregate....LA might actually be sort of nice if all cars electric in 25 years, clean air in Denver, NY, LA would be real nice...
If you look at all the emissions well-head to car the Leaf comes out about one fifth petrol.
"You can get all of this for $33,000, which .... nets out to $20,500." Over here in England the net price is around $37,000 so nearly twice as much:-(
What kind of subsidy is PG&E receiving in order to offer that rate? How long will it last? How would cap and trade legislation affect their future rates? How much does it cost to replace the battery after ten years? What are the disposal fees?
10 years there will be enough cadmium in the ground water that your baby born with two heads can figure out all those problems and solve them. So stop worrying. :)
I'm gonna go out on a limb here and call B.S. Who is going to build out the charging stations to support this? Or the additional power stations or upgrade the power grid/distribution network?
Also, if I'm doing my math right (and I think I am): If the battery loses 5% of it capacity each year, by year 8 you've lost 40% of your capacity/range. So now your 100 mile range is closer to 60. (If the actual range is 75 miles as mentioned above, you are down to 45 miles at year 8.)
I'll bet you a crisp full-fiat $1 bill that VW Jetta TDIs will be out selling Nissan Leafs 10:1 in 2020.
Sausagemaker
Right, the Leaf and all other electric cars are essentially powered by coal or natgas or nuclear fuel... just trading one climate changer for another. Oh, but now we won't have to think about the power generation. It is invisible to the end user, but it is still there.
Do some research on lithium. It mainly comes from Bolivia and is precipitated out of brackish water just like table salt. The biggest problem is that there just isn't enough lithium to go around. How long before we actually get into a "peak-lithium" situation, or have to contend with yet another South American big-shot dictator who wants to put the screws to the Gringos? And don't even get me started on the rare earths that go into the motors that come from.... China!
And, finally, as you pointed out, Sausagemaker, who is gonna build out the infrastructure to recharge these things? It will be cute to see a dozen electrics tethered to their outlets, quietly juicing up for the ride home. Now imagine 500 cars entering a public parking garage, all with 20 percent of their juice remaining, and there are only 475 outlets to go around? It will become the modern-day equivalent of the 70's gas lines... with tempers to match.
http://www.msnbc.msn.com/id/40420491/ns/business-going_green
I'm not convinced. I am also curious to see what happens when the lithium resources are sufficiently stretched. Copper should be interesting to watch as well.
1. if everyone (even gradually) switches to electric cars, why would oil price double? supply/damand, baby!
2. if 10% of all cars are electric - how long do you thing will PG&E fuel those cars at a loss, and how long will US Gov't and Cali pay $13K in bribes?
3. With $33k sticker, limited range, and gegular-priced electricity, wouldn't a $20k hybrid be a lot cheaper?
Seems to me the big beneficiaries if the Leaf, et al gain popularity are the electric utes and SQM, the world's lithium monopoly. A good new business venture might be charging stations tacked onto or replacing gas stations.
Selling the picks and shovels, you know.
How long will the charge last when running the AC in the Texas sun while moving 10 MPH in traffic?
Duo, you are among the more intelligent here.
The way to fix transportation by leaps and bounds is to fix the travelways, not change one energy for another.
Sync'ing lights in a city goes much further effeciency wise when hundreds of millions of vehicles burn gas to play music stuck in traffic. The auto industry is still dead.
No one likes to talk about being smart when there are new things to buy.
I agree with traffic signal synchronization. If people really knew how good their mileage was at a steady 45 mph... Now that I have a 2 mile commute I use my 150cc scooter that gets 80 MPG.
California needs to look at 8-Mile road in Detroit. They figured out 50 years ago that eliminating left turns increases road capacity by 50%, e.g., we spend one third of our street commute time waiting for someone else to make a left turn.
Thanks for the complement.
Another way to help with the left turn issue:
http://en.wikipedia.org/wiki/Pittsburgh_Left
Or at 5 degrees below zero with a thirty mile/hour head wind. Oops.
I think a better idea is to watch EIX. If these things really do take off there is no better positioned utility.
No one drives more than southern Californians.
EIX can and probably already has locked in low price natgas contracts. When and if oil gets to $150, $200 and beyond they will be sitting pretty.
Sounds good, sounds almost too good to be true.
Recharge in 30 minutes? And they give an eight year warranty on the battery? I think we should plan shorting Nissan stock in 4 years or so... that will cost them to replace all those dead batteries!
Without the PGE discount rate, for example if you recharge during the day, the 100 mile drip would cost you $9. Still ok.
So that means Nissan promises you to get 100 miles out of 24 kWh? Which roughly equals 2.4 liters of gasoline, or 0.63 gallons. That's 157.5 mpg (or 1.5 L/100km for Europeans). Not bad at all!
Ed Wallace has tested all the electrics, and says the LEAF is going to kick all the others ass.
He said it is that good.
www.insideautomotive.com
He is on(maybe nationally) Sat 8:00 a.m. - 12:00 p.m. CST.
Smart cookie, and he knows the actual lowdown on oil.
I have absolutely no idea what is wrong with everybody here. Shit. I thought Zero Hedgers were reasonably intelligent. What. The. Fuck.
Here we have a viable, realistic, well-built, efficient alternative to a heroinImeanOILaddiction, and all I see here is objection. Well, screw you. I'm no tree-hugger, and I drive my 1969 442 with glee. But even an idiot like me can see that things are going to have to change. It looks to me like this might, at least, be a step in the right direction. As far as the subsidies are concerned, like it or not, this is becoming everybody's problem.
Wake up and smell the ozone, neanderthals. Something has to come next. And as for the EMP numb-nutz, TELL me your 2010 Yukon will fare any better!
Sheesh.
The subsidies bother me. Let the free market decide. When oil hit $4+ per gallon a few years back, consumers decided to buy high mileage vehicles on their own. The public adapts much faster than control freak government planners give them credit for. The key is to let free market price signals drive demand. I know its an old concept, and one that is rarely heard of these days, but it works much better than the statists would have you believe.
POS.
What gave you that idea? Don't you read their idiotic comments? Which one will be the first to say Leaf Bitchez!? The intelligent ones are the ones that run the site.
Oh, by the way, number one car in Europe and not just for the green cars! Can't wait to get mine and NEVER have to stop in another gas station unless I need some late night Cracker Jacks. I have a 2000 TT with < 100K on it so the 100 mile or < limit should be no problem for my driving habits.
Junk-n-runners. Damn, you yellow bastards are getting obnoxious.
You insult your fellow ZH posters, spout all sorts of nonsense as a refutation, and then complain about getting junked?
Excuse me, but your victim complex is showing.
No. I Complemented my ZH buds by expecting more from them. Junking is just getting stupid. It's intellectually dishonest unless it is accompanied by an erudite, cogent response. By the way, calling what I posted "nonsense" is neither of these things.
I junked you because you earned it.
And to think I LIKED Gene Parmisan...
In ANY of his disguises...
Nissan is claiming to have invented and is now marketing the free lunch, that's what's wrong with that.
I think most of the panning of this is due to this author. He gets dumped on weekly (usually deserved) here...
I've read his posts before and I like him, he seems smart to me.
And you still can't stop one ceo asshole from pumping 20 thousand gallons of gas into his lear jet and taking his friends on a super bowl trip.
Shit buy oil soak rags in it stick it on tiki sticks or the end of baseball bats and make torches out of it. They'll just stick it in tanks and run you down if you don't.
Is that a new model with auxilliary tanks and a towed drone?
I just hope you didn't call those Tennessee boys heifers to their faces. Oh, wait. Since you wrote this article afterwards, I guess you survived.