Renault-Nissan Alliance Forges Electric Vehicle Agreement With Reliant Energy in Texas

The Renault-Nissan Alliance announced that Nissan and Reliant Energy of Houston, Texas, one of the major competitive electricity providers in the nation, have forged an agreement to advance zero-emission mobility in the United States. The announcement helps pave the way for the 2010 introduction of Nissan LEAF, the industry’s first all electric car designed for the mass market. The company expects to begin sales in late 2010. Reliant is a subsidiary of NRG Energy, Inc. (NYSE: NRG), one of the largest electricity generators in the United States.

Nissan President and CEO Carlos Ghosn announced the agreement at the kickoff of the Nissan LEAF Zero-Emission Tour, at Dodger Stadium in Los Angeles, marking the first North American appearance of Nissan LEAF.

The electric vehicle debut was followed by a panel discussion representing the key interests of the environmental, energy and air-quality communities. Participants included Ghosn, Mary D. Nichols, Chairman, California Air Resources Board; David Crane, President & CEO, NRG Energy, of which Reliant is a subsidiary; and Patricia Monahan, Deputy Director, Clean Vehicles Program and Director of the California Office, Union of Concerned Scientists.

"The Renault-Nissan Alliance has committed to becoming a global leader in zero emissions," said Ghosn, who also is chairman and CEO of Renault. "Together, Nissan and Reliant Energy share the vision that electric vehicles offer the best solution to reducing CO2 emissions. The Nissan LEAF is the only all-electric, zero-emission vehicle that will be available to drivers on a mass-market scale and at an affordable price."

As part of the agreement, Nissan and Reliant Energy will develop plans to promote a charging infrastructure for electric cars that encourages home and workplace charging, as well as a public charging infrastructure. The companies will work to coordinate the establishment of policies and help streamline charging infrastructure deployment. Nissan also has agreed to make available a supply of electric vehicles to Reliant and in its areas of operation.

"This agreement with Nissan is another part of our comprehensive effort to speed up the adoption of broad-based electric-powered transportation ecosystem," said David Crane, CEO of NRG.

"We can now see a clear path to having thousands – even hundreds of thousands – of zero-emission vehicles on Texas roads in the next several years," said Jason Few, President of Reliant Energy.

Nissan Motor Co. Chief Executive Officer Carlos Ghosn said U.S. consumer demand for electric vehicles may exceed President Barack Obama’s goal of 1 million plug-in models by 2015.

The automaker began a 22-city U.S. tour today to show its battery-powered Leaf small car. The model will sell for the same price as a similar-size gasoline-powered car when deliveries begin next year, with consumers paying a separate monthly fee to lease the Leaf’s lithium-ion batteries, Ghosn said.

"There is absolutely no reason that you will not have much more than 1 million cars in the U.S. before 2015," Ghosn said at a briefing in Los Angeles. "What the president has said, we obviously want to come up with solutions that would allow us to make that a reality but move beyond it."

About 8 percent of U.S. customers surveyed say their next vehicle purchase will be an electric car, Ghosn said, citing company data. Nissan’s U.S. unit, based in Franklin, Tennessee, has said it plans to get at least 20,000 initial orders for the Leaf by next year.

Nissan is using a $1.6 billion U.S. loan to retool its Smyrna, Tennessee, plant to make Leaf starting in 2012, as well as an assembly line to make lithium-ion battery packs for the car. The company has said it will be able to produce as many as 150,000 electric vehicles and 200,000 battery packs a year.

Nissan Motor Co will keep the price of its upcoming battery-powered Leaf competitive with similar-sized cars and expects to make money on the vehicle despite the cost of its launch, Chief Executive Carlos Ghosn said on Friday.

The five-passenger hatchback, which is being designed to have an all-electric range of 100 miles (160 km), would cost only 1%-2% more than traditional combustion engine vehicles in its class, he said. "On the pricing of the vehicle it is too early to say, but there will be no surprise," Ghosn said. "We know it will be the key to the mass market."

Nissan has not disclosed pricing on the Leaf, but has said it expects the car to be the first affordable, mass-market electric car when it goes on sale in the United States, Japan and Europe by the end of 2010.

Nissan has bet heavily on electric cars and expects that by 2020, 10% of the world car market will be for electric vehicles. It has announced a series of partnerships with utilities and government agencies to advance technology where it believes it has a chance of seizing market leadership.

The Leaf is designed to draw power from a battery-pack developed with Japan’s NEC Corp that Nissan has said can be recharged overnight on a 220-volt connection. Nissan has taken US$1.6 billion in low-cost loans from the US Department of Energy to revamp a plant in Smyrna, Tennessee to make the Leaf. The first models in the US market will be imported from Japan.

Nissan’s rivals have pushed competing battery-powered technologies. Toyota Motor Corp dominates the market for traditional hybrids and has floated plans for a broader range of vehicles under the Prius name. Others, such as General Motors Co and Fisker Automotive, are banking on plug-in designs that rely on batteries for short drives but also include a gasoline-powered generator to recharge the battery on longer trips.

Ghosn, who also leads Nissan’s controlling partner Renault SA, said the key to bringing down the cost of producing electric cars would be to spread development costs across up to eight vehicles for the two companies. "We think this technology is a technology we control, but we need scale. And that is why today we are building an overall capacity between Renault and Nissan of 500,000 cars and batteries a year that we are installing between the United States, Europe and Japan," Ghosn told reporters.

Leasing the car’s batteries is a way to bring down the upfront cost, analysts say, and Ghosn said he preferred to lease batteries because Nissan can have control over replacement as technology improves. But while Nissan plans to lease batteries on a global scale, executives said that they are still studying whether to do so in the US market.

Ghosn said the Leaf would be profitable for Nissan. By contrast, GM has said it does not expect to make money on the first sales of its plug-in Volt, expected to be priced near US$40,00O when it launches in late 2010. "We will make money out of the Leaf," Ghosn said. "We have to make money, because if we don’t make money the technology is condemned."

He added: "Everything we are doing today — and that is one of the reasons we are negotiating with the government — is to make sure this technology can continue to develop. We have a reasonable return on our investments and continue to develop the technology. And the consumer has to pay a reasonable price.

Electric cars could help China and other countries reduce their dependency on oil but the government must provide incentive to make the shift, Nissan and Renault CEO Carlos Ghosn said Thursday. Car makers need backing as they respond to the growing consensus among consumers that zero-emission vehicles are necessary to cope with the environmental crisis, Ghosn told an auto forum in Shanghai.

"With electric power, countries would no longer have to rely on one single commodity — crude oil — to supply all their transportation needs," he said. "For many countries that are net importers of crude oil, such as China, that is a strategic consideration."

Ghosn, who is also president of the European Automobile Manufacturers’ Association, said all major makers were investing in hybrid, clean diesel, electric cars and not one felt "they could stay on the sidelines."

Japan’s Nissan Motor and its partner Renault SA of France plan to release their Leaf electric car, which runs on a reusable lithium-ion battery, in the United States and Japan next year and globally in 2012, he said. Ghosn added that the alliance was in talks with officials in the central Chinese city of Wuhan and the southern province of Guangdong for pilot projects involving the Leaf.

He pointed out that the US, French and Japanese governments were already offering about 7,500 dollars to consumers who bought zero-emission cars. "The Chinese government is conscious of the fact that in order to promote electric cars they have to give something to the consumer, because there’s no way electric cars are going to become mass marketed products unless you give something to the consumer," Ghosn said.

Chen Qingtai, a researcher for China’s State Council Development Research Centre, said electric car development should be a priority for China, which was last year the world’s second largest importer of oil. "The cheap oil era has come to an end," Chen told auto industry executives, academics and reporters attending the forum at the China Europe International Business School.

He said China’s conventional car market was growing exponentially — outpacing the US, with a record 10 million units sold in the first 10 months of 2009. "For the electric car industry it’s opposite, currently we don’t have economies of scale," Chen said. "If we increase the size of production, then the cost per unit will drop tremendously."

The Los Angeles debut marked the first stop on a nationwide tour of LEAF. The Nissan LEAF Zero-Emission Tour will make stops in 22 cities, in 11 states, the District of Columbia, and Vancouver, Canada, offering the opportunity for interested drivers, media, civic partners, businesses and university students to learn more about Nissan LEAF and the benefits of zero-emission driving. Los Angeles-area stops also include Santa Monica, Glendale and the University of Southern California campus. Details can be found at

Nissan, along with alliance partner Renault, is the only automaker committed to making all-electric vehicles available to the mass market on a global scale. Through the Nissan LEAF Zero-Emission Tour, Nissan will be showcasing the electric vehicle and battery technology as well as the company’s zero-emission mobility objectives. Nissan is also furthering the development of an electric-vehicle infrastructure through agreements with the State of Tennessee, the State of Oregon, Sonoma County, San Diego, Phoenix, Tucson, Washington D.C., Seattle, Raleigh, Vancouver, and Mexico City.

In North America, Nissan’s operations include automotive design, engineering, consumer and corporate financing, sales and marketing, distribution and manufacturing. Nissan is dedicated to improving the environment under the Nissan Green Program 2010, whose key priorities are reducing CO2 emissions, cutting other emissions and increasing recycling. More information on the Nissan LEAF and zero-emission mobility can be found at

The Renault-Nissan Alliance has begun zero-emission vehicle initiatives in Kanagawa Prefecture and Yokohama in Japan, as well as in Mexico, Israel, Denmark, Portugal, Monaco, the UK, France, Switzerland, Ireland, China and Hong Kong. The Renault-Nissan Alliance, founded in 1999, sold 6,090,304 vehicles in 2008. The objective of the Alliance is to rank among the world’s top three vehicle manufacturers in terms of quality, technology and profitability.