Japanese Earthquake Disrupts Electric Car Supply, Long-Term Effect Unknown
The pictures are horrifying. The video sickening. With amazing power and speed entire cities have been wiped from the face of the Earth and more than 10,000 people have been killed. Whether through increased media coverage, increased population density, changes within the Earth's natural systems, or a combination of several things, this kind of natural disaster seems to have become more commonplace in the last decade—Indonesia, New Orleans, Haiti, New Zealand and others—but that fact doesn't lessen the impact when it happens.
And in Japan, as the nation comes to grips with the scope of the impact and the human toll, the country's industrial base has also been shaken. Although most of the southern industrial complexes were spared major damage, most Japanese carmakers have had their Japanese factories closed since the initial earthquake and subsequent tsunami happened on Friday to assess potential impacts to machinery, workers, supply chain logistics, and transportation infrastructure.
While it's still too early to determine what kinds of long-term effects the earthquake may have on getting Japanese-built vehicles into the United States and around the rest of the world, what is clear is that the supply of electric vehicles will be affected at least in the short term. Both the Nissan LEAF and Mitsubishi i-MiEV are exclusively made in Japan—no matter where they are sold around the world.
Nissan LEAF Impact
Nissan says that a shipment of 600 LEAFs bound for the U.S. left port in Japan on March 10th, just prior to the earthquake, but that any future impact to LEAF deliveries is being evaluated as the situation becomes clearer. It is unknown if any other LEAFs had been stockpiled at the docks waiting to be loaded onto ships, or if those vehicles were damaged in the earthquake and subsequent tsunami.
The LEAF has struggled with a lack of availability and slow ramp-up since it was launched in December. Recently it seemed as if things were beginning to turn around for the LEAF in the U.S. though, with Nissan saying by the end of March more than 10,000 will have been built for delivery around the world and 4,000 a month would start popping off the assembly line in Oppama, Japan. But Nissan has had the Oppama plant closed since Friday to assess damage and the latest word is that it will not reopen until Wednesday, March 16th. Based on the above numbers, every day the plant is closed is equivalent to roughly 120-130 LEAFs not getting built.
With three nuclear facilities either completely shut down or operating at drastically reduced capacity, Japan is under rolling blackouts, with some estimates saying power may only be available for 60% of the time. In order to conserve electricity under the rolling blackouts the country is now experiencing, Nissan has also suspended the use of air conditioning at many of its buildings—including its world headquarters—as well as ordered all of its dealerships to dim lights and turn of electric billboards.
Mitsubishi i-MiEV Impact
Although the Mitsubishi i-MiEV isn't yet available for sale in U.S. (set for a late 2011 on-sale date, ordering open soon), it is available in other parts of the world on a low-volume basis right now. As with the LEAF, all of the i-MiEVs currently built for delivery anywhere on the globe are built in Japan. Mitsubishi has also had its i-MiEV-producing factories closed since Friday and currently plans to reopen them on Wednesday, March 16th.
Although the events will impact short term delivery of these vehicles, one of the biggest questions remaining is what can be expected in the months ahead. Clearly some ports were damaged by the Tsunami and some factory equipment broken—many cars were also likely damaged in port. In addition, the vast supply chains required to build modern vehicles are surely disrupted.
With three nuclear facilities down and a badly damaged electricity distribution network, Japan will likely take a long time to begin providing power consistently again. Without constant power, the factories will be forced to reduce output. Although everything is far from clear, we may be looking at some kind of impact on U.S. LEAF deliveries until the Smyrna, Tenn., factory comes online at the end of 2012. Perhaps the events will even force Nissan to step up construction of that battery plant and start U.S. production of the LEAF earlier than planned?
The effect on Mitsubishi is harder to gauge, but it may face the same uphill battle that Nissan will when the i-MiEV goes on sale in the U.S. at the end of 2011.
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