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31 October 2017

The new Nissan Leaf and the future of electric cars

The new Nissan Leaf is finally here. This was one of the most anticipated cars of 2017, and with good reason, since it is the most successful electric vehicle in the auto industry history. Over 300 000 units have been sold worldwide so far, with certainly more to come, the new Leaf platform giving shape to other vehicles later to be marketed by Nissan and Renault.

What is the exact significance of this car? What is it telling of the future of electric cars vis à vis conventional internal combustion engines? This note approaches these and other questions from a mostly numeric based perspective.

Design


It immediately stands out: the new Leaf (or Leaf 2.0 as Nissan also calls it) proposes a markedly different exterior design to its predecessor. It now looks far more like a "normal" car than an eccentricity. As I did not particularly liked the first Leaf, I do not particularly dislike this new design. However, the earlier model definitely left more of an impression, without being garish, it projected a sense of uniqueness and vanguard (especially in the "pearl" painting). On the upside for the Leaf 2.0 is the "floating roof" concept, essentially allowing for a two or three chassis colour combination - personalisation rules.

An important improvement introduced with this new design is an increase in cargo capacity to 435 litres (from 370 litres in the first instalment). This brings the Leaf closer to a family car format. It looks perfectly suitable to drive four people and luggage to a week holiday.

Power train


It is not only cargo capacity that increases, both engine and battery are significantly boosted. Power increases to 110 kW from 80 kW, torque goes from 280 Nm to 320 Nm and battery capacity expands from 30 kWh to 40 kWh. According to Nissan this new power train doubles range, from 120 km to 240 km.

Range is often pointed as a weakness in electric cars. These 240 km reached by the Leaf 2.0 are about a third of what a conventional combustion engine vehicle can deliver. However, 240 km equate to at least two hours of continuous driving. I do not recall ever driving more than that without a break. Personally, I would not profit from an increased rage, and I doubt the average driver would. In any case, Nissan is announcing an alternative version of the Leaf 2.0 with a larger battery extending range up to 370 km.

While range does not pose an issue per se, charging time presents the first serious hurdle to regular use. The bottle neck is not in the car itself, but rather in the power output of the charging equipment. Here is a quick breakdown for a full recharge:

Link Power
Charging time
3 kW
16 hours
7 kW
5.5 hours
22 kW
2 hours (40 minutes to 80%)


For the daily commute these charging times are not an issue. But if you wish to pay a visit to your uncle in the next member state some planning is in order. You must identify beforehand the fast charging points on the way and prepare for long stops. A 600 km journey, for instance, can easily take seven hours with the new Leaf. Side note: journey planning for electrical cars will be fertile ground for the digital economy, if it is not already.

Technology


The Leaf is not only an electric vehicle, it is also a bulwark of state-of-the-art technology. The most fascinating is the so called e-Pedal: a single control that allows both to accelerate and stop the vehicle. Push it and the electric engine increases its rotation, lift it and the brakes are applied. Completely lift your foot and the car shall come to a stand still.

Automation features are also introduced, that while far from full self-driving capability, provide the best in the market today. The Leaf is able to park and de-park all by itself and can follow a lane in a highway or freeway.

Nissan is also announcing a programme to integrate the Leaf with the electrical grid, to function as a load balancing battery. This feature is not yet available in Europe and it is not clear when it will. However, it is likely dependent solely on software updates, to what the vehicle itself is concerned.

Price


Unfortunately, it is not only cargo space, power and range that increase, so does price. While the first model had a base price around 30 k$, the press is announcing the Leaf 2.0 at 36 k$ for Europe. Converting the currency and applying a 20% VAT rate it gets to something like 38 k€. The final price may vary considerably from member state to member state as different tax breaks and other incentives to electric cars may apply. As Nissan evacuates tail stocks and benefiting from favourable tax schemes, it is possible to acquire a Leaf 1.0 today for 20 k€.

The price of the new Leaf is bringing it closer to its competitors, particularly the BMW i3 and the coming Opel Ampera-e. Even more expensive alternatives, like the VW e-Golf, look closer now. There is a clear derision of what used to be the main attraction in the Leaf; and of what made it appear so close to a conventional car.

Is it worthy?


An electric car may be more expensive, but it does not consume fuel, therefore it is cheaper to run. This is the key assessment point to understand how close a car like the Leaf is to replace traditional combustion engine vehicles. The remainder of this note compares ownership costs of the Nissan Leaf in first place with the average passenger car. A second reference is used, the Renault Megane Estate, a cheap working class staple. To this end I started by gathering some basic statistics on the average passenger vehicle in Europe:

Price
28 k€
Consumption
5.1 litres per 100 km
Retirement age
10.7 years
Annual distance travelled (petrol)
~ 14 500 km
Annual distance travelled (diesel) ~ 21 000 km


I could not find an absolute average travelled distance, just the break down by member state (in the same report linked above). I thus averaged the distance for petrol and diesel cars in Germany and France, about 18 500 km/a.

As for the Megane reference, it costs 22.5 k€ and its petrol engine consumes 5.4 litres per 100 km.

These figures provide the basis to compute the average cost of owning a car. Beyond the initial price, the owner incurs in other costs: fuel, maintenance and insurance. For the sake of simplicity maintenance and insurance are ignored hereafter, these are assumed to be independent of the type of engine. An electrical car has far fewer moving parts, therefore it is less demanding on maintenance. On the other, any issue with batteries might be rather expensive to solve.

Compared ownership costs are thus reduced down to purchase plus fuel. In its lifetime of 10.7 years the average car covers 198 000 km. At a fuel cost of 1.5 €/l, it totals just over 15 k€. As for the Leaf, to cover the same 198 000 km it will spend over 32 MWh in its lifetime. At an electricity cost of 0.2 €/kWh, lifetime fuel costs come at 6 500 €.

Using the assumptions above, ownership costs for the Leaf come at 44.5 k€. This is remarkably close to the 43 kk€ for the average car, albeit somewhat far from the 38 k€ for the Megane. The graph below depicts how the average fuel cost assumed impacts this comparison.



There is a caveat though, very few owners keep cars for their entire lifetime. I could not find average figures, but this report from the UK indicates that 80% of first time owners in that country sell their car in the first four years. Assuming owners sell their cars after 5 years, ownership costs shift considerably in favour of the average internal combustion engine car. The Leaf reaches 43 k€ while the average car gets only to 35 k€; the Megane stays right on 30 k€, less than 70% of the Leaf. The graph below shows how these ownership costs vary in function of time for fixed prices of fuel.



A car for the energy transition?


A comparison based solely on ownership costs may come across as too austere. Electric cars have other selling points, particularly the improvement of air quality in densely populated areas. But even from an environmental perspective, this high cost must be taken into consideration.

Money is a token to what are essentially flows of energy or matter - or what in more technical terms can also be called negentropy. The high cost of the Leaf means that its manufacture required considerably more resources than a conventional car. Recent price movements of metals like Lithium or Cobalt are but a symptom of this new automotive paradigm.

Cost is also a gauge of environmental impact, and ultimately, sustainability. The high selling price of the Leaf 2.0 and competitor electric cars, may simply mean that environmental impact and resource depletion have just been shifted forward in time, perhaps not at all eliminated. This has been a recurring theme in this blog, to which I will certainly return in the context of mobility.

Caveats


Bear in mind that these computations are highly simplified. The cost of petrol or diesel is not constant, and is most likely set to increase in the short term, as more environment and health related taxes are imposed. Besides that, the petroleum market is set to tighten considerably throughout 2018 and 2019. No attention has been given to interest rates either, which should work slightly in favour of the Leaf.

Summary


The Nissan Leaf 2.0 is the new chapter in the state-of-the-art of electrical cars, showing important trends. The main trait of this new installment is its focus on novel technology, at the detriment of price. Lifetime ownership costs are coming remarkably close to the average car, but for single owners the economics of the Leaf is still far off. For the average owner that changes car every 5 years or earlier, the Leaf is clearly a bad deal.

The exercise carried out herein shows that to be effectively competitive, an electrical car should not cost much more than 30 k€. One could argue that petrol costs are set to rise, but as the experience of the past decade shows, demand destruction processes set a limit around 2 €/l. Therefore the Nissan Leaf 2.0 is unlikely to be the model that finally overturns the passenger car market. That might well require an entirely new battery technology.

On the technical side, there is only one objective issue with the Leaf: charging time. If for daily commute this is not a problem, for long voyages it can become quite a challenge. This also means that electric mobility might still have some important hurdles to tackle before in can enter into the freight domain.

But the fact is that the Leaf is a car worth considering for certain owners. Those willing to acquire a vehicle for the long run and have a soft spot for state-of-the-art technology (are these requirements compatible?) find in the Leaf a real competitor to the average internal combustion engine car.

Finally it is important to question if the current concept of car ownership is logic or even if it will survive the age of the internet. A different ownership paradigm, one in which cars do not stand idle 99% of the time, puts the Leaf under an entirely different perspective. But that is a story for another time.