[ad#post_ad]Nissan has been working hard to achieve positive publicity since they first began discussing the LEAF program.  By then the Volt had been in the spotlight for two years and they had a lot of catching up to do.

Nissan has repeatedly contended they would make a profit from selling the LEAF, which contrasted from GM's admission that they wouldn't profit from the first year or two of Volt sales. GM always said the Volt was an investment in the future where Gen 2 and beyond economies of scale and price reductions would make the car profitable. After all lithium-ion batteries are very expensive at today's prices.

Nissan has now admitted they are in a similar position to GM.

According to a report in the Wall Street Journal, Nissan US sales and marketing cheif Brian Carolin said the LEAF also would lose money in its first two years.

"Over the course of the vehicle life, it is profitable—in year three," he said.

The intial supply of LEAFs  for the first two years will be built in Japan.  That plant has an annual capacity of 50,000 cars, 20,000 of which will be shipped to the US.

In late 2012, Nissan will open its US-government funded Smyrna Tennessee LEAF plant that can build 150,000 cars per year.

It is at that volume when the cars will first turn a profit said Carolin.

According to Nissan USA director Mark Perry, the 24 kwh, 600 pound battery pack will cost less than $18,000 ($750 per kwh).  The packs will eventually be made in the US at a plant in Tennessee that will have an annual capacity of 200,000.

Nissan has an internal target of $9000 ($370 per kwh) for the pack which it hopes to achieve when US high volume production starts.

The caveat here is Nissan can thus only turn a profit if the cars can sell at the projected volumes.  Despite its low cost of $25,780 after the tax credit, and assuming no major gouging, concerns about range anxiety may hamper sales, especially if prospective buyers directly compare the car to the Volt and the flexibility it provides.

Though some will adjust their lifestyles to avoid using any gas at all cost, and they are to be commended, a larger segment of the population are more likely to consider EREVs for now.

Source ( WSJ )