The first five months of 2011 presented a dilemma to producers of hybrid vehicles. Fluctuating gas prices that have recently settled around $4 per gallon would seem to be a boon to these manufacturers. Automakers have seen a 4% decline in overall car sales compared to spring 2010 due to limited funds held by consumers. The earthquake in Japan particularly harmed Nissan and Toyota by damaging production facilities and creating shortages of raw materials. These factors do not completely explain Nissan’s recent reduction in sales expectations for the LEAF EV for the remainder of 2011.
Nissan was enthusiastic last year as the LEAF EV jumped from the auto show circuit into the hands of the first round of leaseholders. This ebullience led executives at Nissan to set an ambitious goal of 20,000 LEAF EVs sold in North America by the end of 2011. The aggressive marketing campaign by Nissan primed early adopters and aspiring owners for the LEAF EV. Nissan’s online reservation system was overwhelmed until the company cut off early deposits at 20,000. These days are already behind Nissan as the revised projection for 2011 is 12,000 LEAF EVs.
Vice president of Nissan Al Castignetti cited several reasons for creating a more modest sales expectation for 2011. Castignetti noted that Nissan sold 2,167 LEAF EVs through May 2011, which would extrapolate to 5,000 units sold through December 2011. The wake of this spring’s earthquake certainly harmed Nissan’s efforts to meet the 20,000 vehicle quota by the end of the year. The automaker had already hedged bets in February when minor production delays were causing grief among early adopters. Castignetti joins a chorus of auto executives in recalibrating expectations for green vehicles even as consumers get restless for vehicles that reduce fuel costs.
The Nissan LEAF model for marketing, leasing and delivering electric vehicles might factor into a sluggish 2011. Nissan’s $99 deposit for the LEAF EV proved to be the easiest part of the process for those lucky 20,000 consumers who filled out online reservations. Confusion due in part to Nissan’s marketing campaign turned off some consumers who assumed they would need to buy high-speed charge units that could add $2,000 to the vehicle’s cost. Nissan also targeted a handful of Western states for delivery of LEAF EVs despite a national tour that seemed to promise an EV revolution from Atlantic to Pacific. It is difficult to blame Nissan alone for unrequited love for EVs as the rest of the auto industry seems to be sitting on their hands. Nissan’s failure to meet expectations wouldn’t be so tough to handle if American, Japanese and European automakers offered competing EVs.
