SageBrush said:
jlsoaz said:
Still, I also didn't fully buy Nissan's answer in 2010; I was concerned when I saw Nissan seeming to buy too much into the "commuters only travel thus far" thinking. ...
I thought at the time, and still think, that their middle ground answer of going for the economically-minded and environmentally-minded buyers primarily, was tragically flawed..... not quite as badly as the blatantly disrespectful tiny econocar short-range BEV compliance-car efforts that were not going to sell very well in the US, but still, not what it should have been, if they really wanted to make money and build business (IMO).
I mis-read your posts to say that Nissan should have tried to corner the 'environmental, financial' conservative crowd. You think they should have built for the Infinity crowd. Look at this graph from Bloomberg NEF
Let's help Nissan build an Infiniti EV circa 2010:
250 mile range, 3 miles per kWh: 80 kWh
-- Manufacturer pack cost: $90k
ICE level amenities and cost in 2010: I'll guess $30k
Inter-city travel: Not possible, or at 40 kW CHAdeMO until it rapid-gates
Battery degradation: ~ 30% in 5 years
So now we are at $120k manufacturer cost for a car that has limited utility and is a ghost of itself in 3 years. That is an upgrade cycle of every 3 years or so, and depreciation of somewhere in the range of $30k a year... presuming Nissan sold at the marginal cost of production. No profit, and no attempt to recoup R&D.
Call me naive, but I'm not surprised that Nissan did not take your advice.
A couple of preliminaries:
- I have started this thread where at some point I hope to carry on more of this sort of branch-off topic discussion.
https://www.mynissanleaf.com/viewtopic.php?p=588828
some comments on Nissan EV Strategy
- Were you going to remove the straw men points, as the moderator requested? Maybe that has been done. If only you had just made your points without quite as much semi-messed-up summaries of others' thinking or the general looking-for-a-fight approach. I think there was some harm to what I regard as an important topic in its way (and I think you may also) but I think we can rescue some of that discussion now, so here is my try:
-------------------
With that said my response is:
On consideration, there is a point to be made that the middle ground that Nissan took circa 2009-2012 had its merits, and one could make the argument for it (perhaps moreso in Japan), but, with respect to the US market, those short-range batteries did not, in my opinion, strike exactly the right chord. I would have preferred to have seen some more open-minded thinking to a 40 or 50 kWh battery option, earlier on, with everything that would have accompanied such a path such as:
a) a transition to acknowledging that once you get into the expense of that size battery for that time period, then you are looking at a $50k vehicle, and as long as you're going to do that, why not let Infniti have a go?
b) more open-mindedness to battery type revisions and innovations.
Overall, my impression of Ghosn from the movie, and Nissan from general reading of industry tea leaves around that time is that they were not quite as head-in-the-sand as some other companies with respect to the coming electric vehicle revolution, but they also were not quite as awakened as they may have thought. They seemed to have what, in my view, were some flaws in their thinking, and as time passed, unfortunately, they kind of affirmed this for me. Examples:
- The idea of Infiniti doing a BEV came not only from me and others but from Nissan and Infiniti. An example of discussion of the back and forth:
https://www.greencarreports.com/news/1093578_infiniti-le-electric-luxury-sedan-to-be-built-after-all-with-higher-range
- years later Ghosn said something about how the company really had to put that many vehicles on the road before it could understand that the sweet spot for EVs was really around 300 km range (or some such). While I couldn't begrudge him that he was underscoring the commitment that Nissan had made, I thought his point was awful. Tesla understood this, or something like it, without putting hundreds of thousands of vehicles on the road. So did others. I remember speaking to a colleague a decade or so ago and he mentioned roughly the same range before US consumers would be interested. He was right.
I think there is a broader point to be made. In my view, especially when I saw "Revenge of the electric car", I took Nissan to be partway there, in having some of the correct attitude and thinking, but not fully there. If they were going to be a company to tackle "The Innovator's Dilemma" or something like it, then I thought they were going to have to rest on their laurels a bit less when they made some nice innovation in EVs, and realize that the tidal wave coming at the automotive industry was not just about the tech, but about the overall of thinking, attitude, and general embracing of being smarter about anticipating customers' wants and needs and not just "waiting to be told".
Anyway, to get to some numbers as you have been striving to do, I think you have over-reached a bit in your framing of things, but at the same time thinking through the numbers does make me realize that when it comes to the 2000-2010 strategizing time period, I'm not entirely sure what I think the automakers could have or should have done. That is, for generations to come, when a business school professor assigns the work to the class and says "Ok, it's 2005 (say), you kind of see this coming, but you manage one of the world's largest incumbent industry participants and need to come out profitable on the other end. What's your solution?"
So, I'm not sure Nissan's answer to this with the 24 kWh Leaf starting in December 2010 can clearly be given a failing mark (though I have to admit it's far enough away from what I would have thought that I'm just not sure). I can say with somewhat greater confidence in any event that by the time 2011-2013 era hit, they should have been hard at work on a longer-range BEV, at least in the 40-60 kWh range, and had an answer ready (or even ahead of time) to the Model S. I'm not sure it was necessary to go after the $100k sedan market (maybe just the $60k sedan market?), but then again, I might be wrong.
On the numbers you try to provide, I don't think it's necessary to suppose 80 kWh in 2010. Tesla only had about 50 kWh in 2008, right? and they came out with 40/60/85 in 2012. Yes, I know the 40 was really unlockable to 60, but the more important lesson to take was that American consumers, in that segment, cared so little for it, and so appreciated the high marginal utility (if I am not misusing the term here, which I may be) of extra kWh from 40-60) that they just said, basically "uh, no thanks". They also said "no thanks" to the 42 kWh Toyota/Tesla RAV4 EV, but there were various possible additional reasons for that clouding the discussion, including the high price for the range, the lack of DC fast charging, Toyota's obvious lack of desire to sell the product, etc.
Note also at some point Nissan was reported as researching a 48 kWh (2x24) BEV of some sort, back in those early days)
So, I think if we look at why I cringe so much when I think back to the approach that Infiniti took to decision-making around 2012-2014, as to a longer-range more-luxurious BEV for American consumers, it includes somewhat different thinking from you about the costs and margins. A 60 kWh Nissan BEV could have been built without losing massive amounts of money per sale around the early 2010s if Nissan had been as urgent about continued battery research as Tesla apparently is, and if they had been open-minded to some of the approach that Tesla took (though some of the hardest part for me here is that I sort of can see some rationale with staying away from some of Tesla's "less to lose" approach to safety and such).
This is not to say that the thinking is entirely different. I t think it would have been hard or impossible to make immediate profits per vehicle in those days, but they needed (IMO) also to have the vision (and the courage of their convictions, since they already did have at least some of this vision, to their credit) to understand that they were turning away some customers, and turning off other customers to some extent, and failing to satisfy what they must have known was a potential demand in the market, and that this can have long-term damaging impacts. These are matters of judgment, nuance and degree (how many people loved their Leafs versus how many turned off, for example), and maybe other points of view will sway me on some of this over the years.