Introduced to the world at the end of 2010, the Nissan LEAF had its first full year of production in 2012.  It’s fair to say that sales have fallen well short of expectations.  CEO Carlos Ghosn’s stated goal of 10% of global light vehicle sales being pure electric by 2020 has long been ignored by other OEMs.

That’s not to say the LEAF has been a failure.  U.S. sales of 9,819 in 2012 are respectable for a small sedan with a list price greater than $30,000.  However, the Chevrolet Volt sold 23,461 vehicles in 2012, although it’s classified as a plug-in hybrid rather than an electric vehicle.  The other volume player in this niche market is the Toyota Prius Plug-in, which didn’t reach the U.S. market until the summer of 2012.  By November the Prius was selling slightly more than either of its competitors.

Nissan has cut the list price of its entry-level LEAF to $28,800, which represents a drop of 18% over the previous model.  The company expects that to increase sales by about 20% in 2013.  With the federal tax credit of $7,500 still available and the benefit of additional local incentives, this will bring the purchase cost below $20,000 in many states, which should attract new customers.  The cost reduction was made possible by manufacturing in the Nissan plant in Tennessee rather than importing complete vehicles from Japan.

A Long Way from 10%

A 20% boost in sales year-on-year seems on target.  The reality is that EVs are still very much a niche market and appeal to a small number of consumers.  Surveys indicate growing interest in electric drive technology, but expressing interest in a poll is very different from writing a check.  The underlying meaning from many poll results is that people would be very interested in electric vehicles if they cost about the same and had a similar range to conventional vehicles.

Unfortunately the EV of today misses both those goals by a considerable margin.  Although the Chevrolet Volt has sold well for a $40,000 vehicle, the conventionally-powered Cruze, which shares the same platform, starts at $17,000 and sold about 10 times as many in 2012.  Although the hybrid drivetrain has now become simply another option on the new car list, the plug-in hybrid and pure electric vehicle remain more of interest to those interested in the technology, or in other incentives such as HOV lane access or free parking.

Range remains an issue for many people, despite many studies showing that a range of about 70 miles is plenty for most drivers on most days.  Buyers need to know that their vehicle can also handle weekend trips of a few hundred miles each way, as well as the daily commute.  Not all can justify ownership of multiple vehicles.  The increasing availability of recharging infrastructure is helping the situation in some cities, but there remains a great deal to do in educating the car-buying public about the new paradigm of plugging in each night rather than filling up at a gas station.

It’s worth noting that the overall sales for Nissan North America in 2012 were about 1.14 million, so LEAF sales represent less than 1% of Nissan’s total last year.  A 20% boost will hit 1%, but that’s still a long way from 10%.