Is there a cost problem with the Nissan Leaf battery?

Is there a problem with the Nissan Leaf battery pack? Yesterday, the French government pulled plans for a Renault battery plant because the Nissan battery packs that were to be built there were too expensive.

Is Nissan/Renault's 10 percent by 2020 EV prediction already dead?

Why is the French government suddenly bearish on Nissan’s batteries?

Yesterday, the French government pulled the plug on funding — worth a few hundred million — for an EV battery manufacturing center in Flins, France. Previously, it had been reported that the battery plant was going to be delayed by two years, but when news of Renault’s disappointment with the costs of Nissan’s battery technology hit French Minister of Industry, Eric Besson, all funding was quickly squashed.

While the Nissan Leaf’s battery pack seems to be technologically sound, is it still too cost-ineffective to build a legitimate business case?

In the past, Nissan’s Carlos Ghosn has claimed that Nissan is willing to spend billions on its plug-in program. Outside of development costs, which probably top $1 billion, will billions more be required to subsidize Nissan’s battery technology?

Sure such a notion sounds a bit insane, but it’s not that far-fetched based on Toyota’s hybrid program and the fact that EV battery technology is more expensive than hybrid technology. Consequently, if Nissan wants the Leaf to resonate the way the Toyota Prius does, it might take billions before any profit is possible based on today’s battery limitations.

But might Nissan and Mr. Ghosn have over-played the potential of the Leaf? Such as predicting 10 percent EV sales by 2020?

Obviously, it’s too early to tell, but the fact that the French government isn’t yet very bullish regarding Nissan’s battery technology because of cost-ineffectiveness is a bit alarming.

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