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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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Heifer: A young cow before she has had her first calf
This is news? Several of my neighbors already have over-priced golf carts, but the next time I want to drive around a ball room with three male heifers, I'll give you a call..., or not.
Cool report. Did some research myself.
What are they saying? You can charge this vehicle in 30 minutes in the city? The 8 hours at home is with 110 Volts, 4 hours at 220 Volts which a special contractor will install when you buy the car.. I think. But charging in 30 minutes? Gosh, the lights in the city will go out if we have too many of these vehicles hooked up.
Great start for the industry. Hope their battery life is better than my blackberry batteries which typically don't charge and last after 2 months of use.
Keep that in mind. The battery is the real problem. Their warranty covers the battery and that could kill their bottom line.
No, the 8-hour charge requires 220V. The 30 minute time is a top-off charge at 440V.
Am I the only one who thinks it would be a bad idea to have a sh*tload of 440v outlets in a parking lot?
I reserved a Leaf earlier in the year, but the promised June 30th purchase date came and went. Nissan sent me some cute bumper stickers amid rumors that the U.S. allotment of vehicles would be cut severely. Actual road tests of the Leaf in the real world (not a climate-controlled ball room MHFT) now show the effective range is closer to 75 miles, not the magic 100.
Nissan did the right thing by warranting the battery for eight years (with a 5% capacity drop per year), but their roll out plan here in the states sucks.
As capacity falls so does the effective range and at 5% a year leaves you with how many miles of travel time after 8 years--25 miles maybe--no different than a cordless drill-the more you charge the batttery the the less power it has .
Question what is the replacement cost for the 600lb battery.
I am supposed to get excited by a 100 mile range that shrinks every year from the optimum 100 miles? People just don't get it - forget about the fact that charging your phone takes miles off your range - what about defrosting the windshield or running the heater? On a gas powered vehicle, the engine uses the heat it naturally generates. Watch that range drop like a stone when you live through a Chicago winter and actually want to see where you are going. These are great, if you live in San Diego (near the coast so you don't need a/c either).
And worse yet, every year the range shrinks. Like haveing to schedule your escalade for repairs each year, and every year they give you a smaller gas tank. I am going to imagine that after 8 years your range is really under 50 miles. Talk about keeping a great re-sale value. No thanks.
even if this thing got 50 mile range after a few years and in the cold or hot (AC), if people could charge at work parking lot and at home at night, 50 miles one way would cover a whole bunch of commuters...as a second car in a family for a steady commuter, this car would work well.
If you have more variable drivign habits and don't have second vehicle available, Volt is made for you...
Just cause its not for everyone and may be short of the promises, does not mean it doesn't have a market
I am sure glad the Chevy Volt is going to be so great, because I believe that I have already paid for at least a couple of them.
"no maintenance"? Engine has only 5 moving parts you say? How exactly does that engine power transfer to the wheels?
Surely Mr. Ghosn could have hired a better sales guy.
Great. Now attach four handles at the corners of the roof. When the damn thing is smashed into a cube in a wreck, it can double as your coffin.
@kaiser
It's actually a large and heavy vehicle, much heftier than it looks in pictures. Not a Cadillac car Excalade (sic lol), but not a Yugo either. My biggest concern in a crash would be containment of the lithium in the battery pack. It likes to burn, and it burns hot. Car makers have learned to keep gas tanks intact, so hopefully Nissan did their job on the battery pack as well.
Good point, Roger. I was more concerned with weight distribution and cabin integrity in a crash. As in aviation fuel, there is no good place for that battery.
I actually like the concept as a little old lady car, or a second car in a small town or retirement community. I think we're a generation or two away from something that works in all weather for the way Americans drive (and the junk we keep in our cars).
That 100 mile range will sink fast when using air conditioning, lights, recharging your computer, all the crap that people will do without thinking, but such is life.
'Free fuel'...electricity costs nothing now? 'Free maintenance' I wasnt aware that electric things dont break down. $20,500 is free in what world?
Eh said maintenance, not repair cost. You seriously don't see the advantages of electric motors versus internal combustion ones?
"Don't look for the tail pipe"
Yea, because it is that huge smokestack on the local coal burning powerplant.
Motors are nice, so are engines. It's not that there aren't advantages, it's just that it's nothing the free market can't work out sans subsidies.
600 millions mini smoke stacks adds up to a pretty big one! Plus you have to marvel at the simplicity and efficiency of the electric motor. Occam's Razor in all of it's splendour :o)
Government subsidies are crap because governments are crap. Corporatism is a very sad state of affair that we have allowed ourselves to be in. Still there is value in pooling our resources for the purpose of planning ahead. To do research is to find solutions to future problems. Thanks to human awesome imagination, we find countless applications for every scientific discoveries. So let me propose a solution to most of our problems on earth. An of International Research Institute. Internationally funded and owned. Three points of interests here: Funding, Direction & Performance
Funding: Involve public and private interests. We all chip in with some tax money based on GDP on a yearly basis. Make it attractive to investors by involving patent laws, or whatever. Don't forget that, as Bill Gates has already figured out, a lot of Mega Wealthy don't know what the hell to do with their money.
Direction: What to do with all this brain power? Every contributing country votes. Vote should come from the scientific community, not politicians. I`d vote for Electricity Storage Research.
Performance: Hire the bests and pay them well. The US 600b bailout alone could have funded this for a decade.
To make all this happen, you have to vote right. Americans are lucky to have Ron Paul. We Canadians only have a choice of certified, prime and proper Goldman Sachs Bitchez. Gotta change that first eh!
Disclaimer: I'm not a researcher.
All the Nissan Leaves (Ha) will be DOA when we get EMPed
so will your car
would a modern gas engine auto run after EMP'd? I'd think not w/ all the chips involved in running one now.
Thats why I keep an extra FPGA stored in a faraday cage ;)
That's good for the economy - it creates more consumption.
Did you see a picture of that thing? U-G-L-Y.
$5000... $7500... Plus the subsidies behind the scene. Hope you're thanking the real, self-sustaining economy your do-goodism is ripped from. Never mind the great new technology they might invent if they were allowed to keep their own $$...
(I don't have a problem with great new technology coming to the forefront, but by God, do it on your own dime like the rest of us.)
Like wow, if the government doesn't support alternate energy, change will never come. Do you want your kids to grow up in a climate wrecked world?
Automobiles can't run on alternative energy. The math doesn't work, i.e., net energy. I just hope my property next to the train doesn't get confiscated.
Who is to say that a warmer world is a worse world? And anyway, the world has been getting warmer for several thousand years. Over geologic time, the earth has been covered in ice from pole to pole, and it's been balmy, beach weather at McMurdo. Deal with it.
The Segway will change everything!!!!
The high-price will not endure the rush of knockoffs once the patents expire (or perhaps before they do). Meanwhile GM is working with Segway on the "PUMA" ... sort of a "personless rickshaw" ... should be good for more than just a few laughs, should be good for getting around cities. Add self-driving capabilities to it courtesy of DARPA or Google, and who knows?
File under "Dud."
Funny, but I don't remember hearing you complain about the much-larger subsidies for the petroleum industry.
by shargash "Funny, but I don't remember hearing you complain about the much-larger subsidies for the petroleum industry."
Funnier: Who the hell are you? Do you know me or my views on Petro, or subsidies at large?
We don't know the real price of anything out there given the massive amounts of intervention, and the misdirection it brings to an economy eventually chokes it to death. Where does one even begin?
As for Autos & Energy:
Those are just for starters... And I don't like any of it, so please firmly stick your comment where it belongs.
Oil industry is actually a net tax payer. While subsidies are offered to encourage expanded production, they result in a further net increase in taxes. (If you give a $1 tax credit for exploration, the feds then earn $2 in incremental taxes off the new production.
If you need a subsidy to make a product viable, it isn't really viable, is it? When do the taxpayers earn their $$$ back?
I'm sure the leaf will be great for the right market... until people start getting incinerated in 1400 degree lithium fires or when medical responders are electocuted by damaged wiring.
Lastly, it won't get 100 miles. Under real world conditions it's around 65 - 75, and that's new/clean. As the battery pack ages, it will decline significantly. Especially since Nissan didn't include a true cooling system for the battery. Does your operating cost projections include replacing the battery pack? Do you get a tax credit for that?
Just wanted to get this near the top. Why I am unimpressed with big auto: http://www.100mpgplus.com/