Nissan Plans To Drive Down Electric Car Costs

Nissan CEO Carlos Ghosn told The Wall Street Journal that his company plans to make electric cars price-competitive without government subsidies. The newspaper said that Ghosn described a three-year time frame for the cost-cutting effort, and said that government incentives for electric cars would be needed during those three years.

            The key, Ghosn says, are economies of scale, particularly in the production of batteries. “Scale is absolutely important,” he told the newspaper.

            Ghosn’s decision to pursue electric car technology is apparently sincere. He has repeatedly said the company’s future is in pure electrics, rather than hybrids or even plug-in hybrids. In the second half of 2010, Nissan plans to begin selling the Leaf, a battery-electric vehicle.

            His decision is considered to be a daring move by some in the auto industry, who have watched the battery-technology-of-choice evolve from lead-acid to advanced lead-acid to nickel-iron to sodium-sulfur to zinc-air to zinc-nickel-oxide to nickel-metal hydride to lithium-ion over the past 20 years. Lithium-ion battery makers are still trying to dramatically drive down the cost of the technology from more than $700/kW-hr today to less than $200/kW-hr in the next few years.

            Experts, however, have predicted that the cost of battery technology will not drop below $400 kW-hr by 2020, even at larger production volumes.