From the Back of the Pack: Nissan Upsets Rivals with New 100% Electric Vehicle

The Potential Economic Impact of an Evolving Industry

More than 47,000 Zero Emissions Nissan Leaf electric cars have reportedly been pre-ordered from the company(source: a phone call to their PR office made on May 19, 2010), and the first model of the Leaf was only recently revealed at the 2010 Detroit Auto Show (which took place in August of last year). The car is not even due to arrive on the market until December, so this incredible backlog is most likely indicative of major delivery delays as the August, 2009 edition of BusinessWeek indicated the company’s production capacity at that time would only allow them to make 12,000 cars by March. (the site for the car is here: http://www.nissan-zeroemission.com/EN/LEAF/)

The Leaf promises gas-independent driving and the ability to travel as far as 100 miles on a single charge. What's more, it can be fully charged for a total cost of roughly $2.75. The car uses a series of lithium-ion batteries for charging--these are the same kind of batteries as those used for charging most cell phones and laptops.

For those concerned about performance, Nissan claims the Leaf can reach speeds of 90 mph.

Nissan is still unclear about the availability of planned public charging stations, which would be necessary for trips longer than 100 miles since the car does not come with a gas tank, however they indicate that the car can be fully charged at various time intervals from both a standard 110V outlet and through super-charging kits that would speed up the process greatly.

The company is looking into ways to increase production, in order to roll out more cars in early 2011. It will have competition in the electric car market from the Chevrolet Volt and the Toyota Prius Plug-in Hybrid, but the Volt only promises 40 miles on one charge and Prius has not yet revealed its mileage. What is most surprising, however, is that much of the limelight had been given to the Volt and the Plug-in Hybrid during the run-up to this key moment in the automobile industry.

Nonetheless, I make three important observations from the development of the Leaf and its brethren as it pertains to the industry and to the current greater flailing economy: First and foremost, it is incredible that in the midst of the kind of economic turmoil we are experiencing right now, that an industry exists that cannot keep up with demand. Our governments (worldwide), remain focused on the symptoms of an infected economy instead of the economic patient itself. Our political leaders have an opportunity to help create and/or stimulate the creation of millions of jobs through the advances provided us in both the auto market itself as well as peripheral markets that will necessarily build off the advancement of such a huge industry. With stated unemployment in the US around 10% (effective unemployment closer to 18-20%), expectations of deflation and wage stagnation, a sour real-estate market, serious credit concerns and all the other headwinds facing world economies, is the insatiable backlog facing Nissan (and presumably other electric car makers) not a beautiful silver lining of an otherwise dark and stormy cloud? Can we not see the potential applications of this new technology constructively impacting other industries? Why is our government patching up gaping wounds (high unemployment) with expensive band-aids (extending the unemployment benefits for a third time) to the tune of 60 billion dilutive American dollars when the real problem is that those who still haven't found a job after 37 weeks are either waiting for an industry to come back that may be dead and gone forever, or simply do not have a set of skills that are appreciable in our modern economy. All of the money our government is doling out to appease a disgruntled part of society, dissolutioned by the inability to provide for their families and participate in the progress of their species, is being taken from those who have skills and are still working. What's worse is that this path to governing is completely unsustainable and as a society we are very near a tipping point. A program or series of programs targeting skill-building will inevitably be needed if we are to escape this mess intact and the only feasible area where such an investment will have a long-term positive return is in an industry that is growing in importance and evolving the way we live. Progress, itself, is the best and most sustainable motivation. Electric transit and sustainable energy storage and are a viable option (though not the only one).

A second and connected observation I have made deals with the lithium-ion batteries themselves. Actually, it is more a concern than an observation. Having witnessed the evolution of lithium-ion batteries in cell phones and laptops, it is clear that the technology has incredible promise. However, it is also clear that we have still not managed to perfect the technology. My MacbookPro, which I bought two years ago, only remains charged for about a tenth of what it did when I first bought it. In fact, the short duration has lead me me to use the laptop much more like a desktop in that I never unplug it anymore. Such an option will not be viable for electric cars for obvious reasons. One might say, just buy another battery. Okay... sure. Well actually, it will be a sleeve of batteries (think about changing 3 or 4 Duracell batteries from a Magnum Flashlight. But the cost of lithium-ion batteries is not going to be the hundred or so dollars one might expect to pay for a lead-acid battery. It will end up costing you somewhere between $3000 and $8000 dollars "for parts and labor." This is an important consideration in and of itself. But one must also consider the fact that these batteries also depend on a raw material that as of yet seems to be in large enough supply to support demand. What happens though, when they become the standard? Will we then be replacing one sacred raw material (oil) for another (lithium)? Of course, the electricity itself has to come from somewhere too, and unfortunately we have yet to fully incorporate enough renewable clean energy to replace oil. Yet, that last point is directly related to my earlier observation about the government directing all their (cough, cough) "healing powers" at the wrong areas of our economy.

One last observation I have made relates not so much to the electric or hybrid component of the cars themselves, but to their size. I suppose it is inevitable that cars should get smaller, certainly in the US there is a glut of unnecessarily large vehicles. However, I cannot help but wonder what the automobile landscape will look like in 10-15 years. Its quite exciting.