According to a report by AllCarsElectric.com [2], Nissan claims that it does not expect to take a loss on the 2011 LEAF. Director of product planning, Mark Perry, says that the company's long legacy of battery development and first-to-market status put it on a different playing field from other carmakers. "We have 17 years of R&D coming to market," Perry told the site. "It's our battery pack. We're not paying somebody else's margin."
Given the vehicle's $32,800 price tag (and a questionable Wall Street Journal [3] report that the LEAF's lithium ion battery pack alone currently costs nearly $18,000 to produce,) the suggestion that Nissan could possibly turn a profit on the vehicle in its first year is surprising. (Though apparently this isn't the first time [4] that Perry has made this sort of claim.)
Still, Nissan's communications about the LEAF's profitability have been confusing for some time now. In May, the company's North American director of sales and marketing, Brian Carolin, told the Wall Street Journal that "over the course of the vehicle life, it is profitable—in year three." So is LEAF going to make money in its first year or not?
In truth, there are probably a lot different ways to answer that question—and credit Nissan with using a few of them. We don't know how much Nissan is actually spending on its battery because battery cost is a carefully protected trade secret. We also never know what kind of accounting methods a carmaker is using when it makes these kinds of statements unless they choose to tell us.
One thing that we can take from these reports (and the unwavering confidence that company representatives seem to have in the LEAF,) is that Nissan does not view the LEAF as a "halo car." Not only does the carmaker expect to make money off of the LEAF and the other electric vehicles that will follow, it expects to make a lot of it. And with a production capacity that will soon approach 500,000 vehicles per year, even if early profits are a bit on the "theoretical" side, Nissan will be in a position to meet demand almost immediately—and know how much costs will be in future.
