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Nissan Admits Arrogance in Sales of Taxpayer-Subsidized Leaf
National Legal & Policy Center ^ | December 19, 2012 | Paul Chesser

Posted on 12/19/2012 10:52:23 AM PST by jazusamo

Ghosn photo

A top Nissan official has said the company was “arrogant” in its marketing and sales approach for the all-electric Leaf, which received a $1.4 billion stimulus loan guarantee fromPresident Obama’s Department of Energy.

Not that the company is going to return taxpayers their money, since the premise upon which Nissan received the loan were ridiculously high production estimates. Too much in expenses would have to be eaten otherwise.

“We were a little bit arrogant as a manufacturer when we went to the 50-state rollout,”said Al Castignetti, Nissan’s vice president for sales, to Automotive News in late November. “We had assumed that there were people just waiting for the vehicle who would raise their hand and say, ‘Give me a Leaf, give me a Leaf, give me a Leaf.’”

Considering there weren’t many people “raising their hands” in the few states where Nissan did roll out the Leaf, that was quite a presumption. And the wildly overstated claims the company gave DOE – which readily accepted them -- included estimates of the equivalent of 39,000 cars removed from the road per year, 204,000 tons of carbon dioxide “avoided” annually, and 23 million gallons of gasoline displaced.

Actually, those numbers are pretty arrogant. Nissan CEO Carlos Ghosn (pictured) last year predicted sales of 1.5 million EVs by 2016, and said EVs will account for 10 percent of new car sales by 2020.

“By the end of last month we had sold 15,000 (globally) Nissan Leaf,” he said in October 2011. “It is already the most sold electric car in history.”

This was as Leaf sales were on their way to only 9,674 units in the U.S. for 2011. It’s as though Ghosn created his own virtual EV game that only DOE was invited to, in which they dreamt up a plug-in paradise where fossil fuels are demonic obstacles and extension cords choke them into submission. Then they could take their fantasy game numbers (including bonus points for “avoiding” the CO2 crash wall) and send them to DOE’s Loan Program Office for posting on the Web, while the Japanese auto interloper made away with U.S. taxpayer prize money.

The arrogance was viral throughout Nissan, which ignored the worldwide apathy forelectric cars. In September 2011 CarsUK revealed in a survey of 12,000 Brits that none of them planned to purchase a pure electric car like the Leaf when they replace their current vehicle. Two percent said they would consider purchasing a hybrid, such as a Toyota Prius or something like it.

And as NLPC reported, an October 2011 survey of 13,000 consumers from 17 countries found that “no more than 4 percent of consumers are satisfied with what electric vehicle manufacturers have made available.” Of the many shortcomings, respondents said the EVs’ limited range was a top concern. Most said they wanted a capability to go 300 miles, which is far beyond the capacity of any EV on the market. The Leaf’s range is 73 miles on a charge, if the weather is not too hot or too cold.

Not that Nissan cared. Mark Perry, director of product planning and strategy for Nissan North America, told Web site (published by Edmunds) “there’s no market need” for an EV that can travel a few hundred miles before recharging. How’s that for arrogance?

Rather than pay attention to what people who could be his customers said, Perry instead reviewed the data of how existing Leaf owners used their vehicles. The results of the EV Project, overseen by DOE, showed the average Leaf driver only traveled 37 miles per day, far shorter than the alleged 100 mile range that Nissan was claiming at the time the car could go on a full charge. Never mind the only people whose habits they observed already knew the EVs’ limitations and bought one anyway.

But the evidence mounted well before that. The Daily Mail reported in January that sales of electric cars in the United Kingdom fell so sharply that there are more charging stations than there are vehicles.

“Just 2,149 electric cars have been sold since 2006, despite a government scheme last year offering customers up to £5,000 (about $7,700 U.S. dollars, similar to Obama’s $7,500 tax credit per EV) towards the cost of a vehicle,” the U.K. newspaper reported. “The Department for Transport says that around 2,500 charging points have been installed, although their precise location is not known.”

That’s just 430 cars sold per year. In addition, Britain spent £30 million on charging points for public and business locations, and EV buyers have taken advantage of only £3.9 million of the £300 million in government grants made available for EV purchases, according to The Daily Mail. In the U.S., besides the EV subsidies and tax credits, the charging station infrastructure and vehicle battery industry have also been subsidized with billions of Recovery Act dollars.

In his semi-mea culpa this month, Nissan’s Castignetti attributed the Leaf’s failure to catch on in part to the lack of infrastructure.

“We didn’t prepare our dealers properly,” he told Automotive News, which may make you wonder what kind of people were given the $1.4 billion to play with. “We’ve pulled back a little bit and are telling our dealers, ‘You don't market this car traditionally. You don’t put it in the newspaper. You need to go and find the electric car buyer in your market.’”

That sounds a lot like Ford’s approach with itsFocus Electric, whose head of global marketing said to USA Today earlier this year, “The marketing of the Focus Electric is to people who buy electric vehicles, not to you and me. We’re focused on the people who buy them.” That’s $5.9 billion in taxpayer stimulus for another company not trying too hard to make electric cars a success.

But in truth, as Car and Driver reported last month, the alternative vehicles are barely on the marketin order to comply with government-mandated Corporate Average Fuel Economy (CAFÉ) standards. The automakers incur huge penalties for failing to bring up the average gas mileage for the vehicles they sell up to federal demands. On the other hand, with taxpayer subsidies, the car companies get much of the expenses for the lousy-selling EVs in their lineups covered.

“In many cases this is intentional,” Car and Driver reported, “with automakers building EVs to satisfy regulators and leasing a limited number of loss-making vehicles in California and a handful of other states.”

Even Nissan is beginning to admit this publicly, if not loudly. This year the Leaf sales pace trails 2011’s, with only 8,330 sold through November.

"No carmaker makes 54.5 miles per gallon without alternative-fuel vehicles,” Castignetti told Automotive News. “Direct-injection engines are not going to get you there.”

He added that Nissan erred by “selling Leafs like Altimas.” Meanwhile at the Los Angeles Auto Show last month Ghosn, maintaining his straight face, said he remains “very comfortable in the potential for at least 500,000 cars a year [globally]. We don’t think that we overinvested in this.”

Of course he doesn’t believe that. It’s taxpayers who were forced to do so, in the ultimate act of arrogance by both government and crony corporatists.

Paul Chesser is an associate fellow for the National Legal and Policy Center and publishes , an aggregator of North Carolina news.

TOPICS: Business/Economy; Government; Politics
KEYWORDS: cafe; doe; electricvehicles; governmentloans; leaf; nissan; nissanleaf; obama; stimulus; taxcredit

1 posted on 12/19/2012 10:52:26 AM PST by jazusamo
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To: jazusamo

2 posted on 12/19/2012 11:02:58 AM PST by HangnJudge
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To: jazusamo

while I was shopping for a new car this summer, I spoke to a salesman about the Leaf and if the miles per charge were realistic.

He said in the summer, without wind or running the air conditioning, yes, the sticker was accurate. But in the winter, expect abut 40 miles. That wouldn’t do me much good if I wanted to watch a football game that’s 60 miles away. it’s a glorified golf cart.

3 posted on 12/19/2012 11:06:20 AM PST by Mountain Bike Vomit Carnage ("Glory to God in the highest, and on earth peace to men on whom his favor rests.")
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To: jazusamo; a fool in paradise; Slings and Arrows

4 posted on 12/19/2012 11:08:34 AM PST by Revolting cat! (Bad things are wrong! Ice cream is delicious!)
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To: jazusamo

Arrogant is fine for the nitwit liberal target market who would want those ugly things. They voted for the arrogant Obama, love the arrogant Mrs. Obama, swoon over arrogant entertainers, and are arrogant themselves, wanting to shove their liberalism down the throats of normal people.

I recently did a personal survey of Obama-stickered vehicles. Little ugly riceburners won the Obama sticker survey by a 10:1 margin.

5 posted on 12/19/2012 11:19:41 AM PST by Proud2BeRight
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To: Mountain Bike Vomit Carnage
It's outrageous that taxpayers are providing subsidies for companies to build these vehicles and tax credits to people as an incentive to buy them.

These CAFE standards will probably not be met by auto companies even with EV’s unless sales of them drastically increase which is doubtful.

6 posted on 12/19/2012 11:21:55 AM PST by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
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To: jazusamo
We had assumed that there were people just waiting for the vehicle who would raise their hand and say, ‘Give me a Leaf, give me a Leaf, give me a Leaf.’”

I'm sure there are.

7 posted on 12/19/2012 11:24:10 AM PST by Oztrich Boy (By doubting we come to inquiry, and through inquiry we perceive truth. -; Peter Abelard)
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To: Revolting cat!

That is so gay....

8 posted on 12/19/2012 11:28:21 AM PST by central_va ( I won't be reconstructed and I do not give a damn.)
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To: jazusamo

This is largely due to Ghosn himself. I saw the documentary with him pushing this, he said he banked his whole career on it as well as the company.

Nobody dared opposed him. He ought to suffer significantly for it because he’s damaged the company and that affects a whole lot more people than just him.

9 posted on 12/19/2012 11:32:38 AM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: Secret Agent Man
I agree, he should pay a big price. This EV thing was pushed by enviros worldwide and has not panned out nor will it with current technology, I doubt any company manufacturing EVs is making money on them.
10 posted on 12/19/2012 11:46:43 AM PST by jazusamo ("Intellect is not wisdom" -- Thomas Sowell)
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To: Mountain Bike Vomit Carnage
But in the winter, expect abut 40 miles. That wouldn’t do me much good if I wanted to watch a football game that’s 60 miles away. it’s a glorified golf cart.

The salesman is correct. On a full charge (which takes 12 hours) you might can go 50 miles WITH NO HEATER ON! Some poor automobile reviewer had a bad experience one cold day with one of these POS's.


Nissan Leaf a comfortable, fun car to drive (For 50 Miles - Then it Dies!)

Monday, February 14, 2011 10:28:45 AM · by Responsibility2nd · 127 replies
San Antonio Express News ^ | 02/13/2011 | G. Chambers Williams III
The all-electric Nissan Leaf is now officially on sale, advertised as the first mass-market battery-operated car on the market. It uses no gasoline — and has no tailpipe emissions, because it has no tailpipe.And even though it's battery powered, like a golf cart, it's a real car, fun to drive, with comfortable seating for up to five people and styling that's mainstream, not quirky like some of the hybrids and earlier electric cars.For many, this even will be a practical car, one that can meet their everyday transportation needs — especially if they live, work and shop within a small...


11 posted on 12/19/2012 12:07:54 PM PST by Responsibility2nd (NO LIBS. This Means Liberals and (L)libertarians! Same Thing. NO LIBS!!)
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To: jazusamo

Electric vehicles are not practical, as designed, because of battery limitations. When batteries are improved, or a fuel cell developed, which roughly has the same energy density as gasoline, they may succeed. NOAA recognized the battery performance barrier decades ago and tried to eliminate it - so far without success. Perhaps other sources of electricity can be developed? Time will tell the tale.

12 posted on 12/19/2012 12:17:22 PM PST by Citizen Tom Paine (An old sailor sends)
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To: jazusamo

Nissan is likewise acting “arrogant” regarding their failure to address the issues raised in NHTSA Action Number DP12004. Specifically, damage caused to transmissions by contamination of engine coolant. Many models affected. Approx. 600 plus complaints. Very expensive repair bills. $4-7K...

13 posted on 12/19/2012 12:24:56 PM PST by donozark (I was planning to spend Christmas in Damascus, until I read Isiah 17:1...)
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To: Nachum; Red Badger


14 posted on 12/19/2012 1:09:02 PM PST by Army Air Corps (Four Fried Chickens and a Coke)
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To: Jet Jaguar; NorwegianViking; ExTexasRedhead; HollyB; FromLori; EricTheRed_VocalMinority; ...

Thanks Army Air Corps

The list, Ping

Let me know if you would like to be on or off the ping list

15 posted on 12/19/2012 1:17:30 PM PST by Nachum (The List is off the Google blacklist-
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To: jazusamo

The reason they don’t sell is they cost to damn one truly interested in lowering their cost to operate would buy one of these frauds!!!

16 posted on 12/19/2012 2:08:49 PM PST by ontap
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To: jazusamo
And like all the other Green Boondoggle, our elected representative in Washington will not dare say a bad word about Obama!

And this Nissan news just as us taxpayers take a 40+ Billion loss from Obama's GM giveaway to the UAW.

17 posted on 12/19/2012 2:12:39 PM PST by TexasCajun
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