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Ghosn: EV users no longer suffer from “range anxiety”

CEO Carlos Ghosn announces the creation of Alliance Ventures.

The Nissan, Renault, Mitsubishi chairman promises the alliance will now focus its EV efforts on affordability instead

Nissan-Renault-Mitsubishi Alliance chairman Carlos Ghosn, has spoken about the group’s new focus on the affordability of EVs, citing a change in consumer interest.

Ghosn believes that EV consumers are less concerned aspect such as range and autonomy, as long as automakers can guarantee a 300km range.

“We have seen that consumers do not talk anymore about range or autonomy as long as you guarantee more than 300 km,” Ghosn told reporters during a media briefing in Hong Kong, “You had to have 500,000 [electric] cars on the ground to understand that consumers do not put autonomy on top of their concerns any more when you cross 300 km.”

The Alliance has two EVs that pass this milestone, with the ZOE EV claiming a range of over 300km and the 2019 Nissan Leaf projected to have a range of 362km on a 60kWh battery.

Ghosn’s statement is also supported by a recent AAA study, which revealed that ‘range anxiety’ is lessening, especially amongst millennials, compared with previous generations.

Instead the automaker alliance is placing focus on the affordability of its future EV models – particularly in the case of models produced for the Chinese mass market.

The EV market in China is the fastest evolving globally, and yet Ghosn believes that the Nissan Leaf’s price point is too high for consumers. Nissan’s joint venture with Dongfeng, the Chinese automaker, will launch the Kwid EV in China in 2019 and expects the model to have a price point of around US$8,000:

“When you look at the electric Chinese cars, they are very, very affordable. The price point of the Leaf today is not adequate for the Chinese market,” he said. “[So] we’ve come up with the ‘Kwid’ EV, a much more affordable electric car,”

Nissan also recently announced plans for its first mass-production EV for the Chinese market: the new Sylphy Zero Emission.

However, Goshn didn’t provide further details on how the Alliance would ensure that affordability in its future EV models.

 

Pack pricing

In general, the EV industry is seeing a shift in pricing, with Bloomberg New Energy Finance (BNEF) recently predicting that EVs may be cheaper than ICE-powered models by 2025.  Yet this milestone is only feasible with the continuing drop in cost of lithium-ion batteries.

The average price for battery packs in 2017 sat at around US$208 per kWh, but BNEF estimates that this could drop to just under US$70 a kilowatt hour by 2030 – a 67% drop – which could dramatically impact price points for EVs in the future. More recent forecasts suggest the industry could even break through the US$100 per kWh mark by 2025.

Even with the costs of vehicle and supporting architecture remaining static, it would mean medium-sized newbuild battery EVs priced at US$25,000 by the end of the next decade.

The news that the biggest automaker Alliance is focusing on affordability of its models will come as welcome news to prospective EV users everywhere. Although Ghosn is placing much focus on the Chinese market, the drop in production predicted by BNEF will translate to a much more affordable EV market over the coming years.

 

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