Electric Vehicle Wars: “Dude, Where’s My Warranty?”
As I mentioned here a few weeks ago, I’ve forked over $99 to reserve a Nissan LEAF all-electric vehicle. And as of mid July, so have over 16,100 other people, according to Nissan.
Since putting down my deposit, I’ve received numerous e-mails telling me what a great car it will be, what a great choice I’ve made for the environment, etc.
That’s when I actually get the car, of course.
So far, nobody can actually tell me when to expect delivery of the thing! When I called Nissan, the representative gave me her canned answer: “We’re releasing it in selected markets across the country late this year, followed by a general release to the entire United States next year.”
And since Nazareth, Pennsylvania isn’t exactly a humming metropolis, I doubt it will be one of the “selected markets.” There goes my hope of being the “first LEAF owner in the northeast!”
But Nissan – and other electric vehicle manufacturers – has a much bigger issue than deciding which markets to hit first…
Electric Vehicle Warranty Wars
It would appear that Nissan is in a bit of a quandary as to how to structure the LEAF’s battery warranty.
And that puts Nissan in a dilemma (or possibly a competitive advantage), given that several of its competitors have already announced their battery warranties. For example…
- General Motors announced a bold, 8-year/100,000-mile warranty for the upcoming Volt’s battery pack.
- Bordering on the ridiculous, Tesla announced a 3-year/36,000-mile warranty on its $36,000 battery pack for the Roadster. Of course, the Tesla Roadster costs over $100,000, so perhaps it’s not unrealistic to expect its battery pack to be so expensive. But it’s a fairly safe bet that Tesla Roadster owners aren’t buying the car to save a few bucks at the pump.
Given that the average all-electric vehicle battery costs around $16,000 – a significant premium over a gasoline version of the same vehicle – the length of battery warranty is a big issue for all electric vehicle manufacturers.
The Electric Vehicle Battery Conundrum
And as I worked my way through the extensive survey that Nissan sent me, the company’s issue became obvious: What time and mileage periods would I feel comfortable with when it comes to the battery’s warranty?
- 5 years/60,000 miles?
- 8 years/100,000 miles?
- 10 years, 150,000 miles?
Sounds like a fair enough question. But the problem is that the average consumer is clueless as to the performance degradation for lithium-ion batteries over time.
And Nissan has admitted that these batteries will degrade over time and you won’t get the same range after five years that you will get when you first drive the car.
The survey said: “All batteries, like those in cellphones, laptops and vehicles, lose their capacity over time. At full charge when new, the Nissan Leaf will have an approximate range of 100 miles, but can be more or less depending on usage and climate.”
What does that really mean? Let’s do a little translating:
- Usage: Using your car every day for commuting presumes you’ll be recharging it every day. Lithium-ion batteries – while better than nickel-cadmium – have a limited number of overall charging cycles before their useful life starts to degrade. Perhaps Nissan has solved that problem by limiting the charging rate.
- Climate: Lithium-ion batteries have a temperature curve that reduces their total available power when it’s colder. So if you live in Minnesota, you can bet on a much-reduced range in the winter. Plus you’d presumably be using the heater, too, which would further drain the battery.
The area where you live is a big factor in determining how long the battery will last. For example, if you live in a hilly area, you’ll need more power than in flat locations, thus decreasing the battery’s range.
So Floridians should fare well with the car on flat terrain in the winter. But they’d have a problem in the summer when the air conditioner is on. The battery will power its compressor, once again reducing range.
LEAF Versus Volt: The Electric Vehicle War Continues…
Comparing the LEAF and the Volt is like comparing apples and oranges. Both are electric vehicles, but that’s about where the similarities end.
- It’s all-electric. There is no internal combustion engine.
- Its battery pack is 24 Kilowatts (KW), rather large for an electric vehicle. Why? Because the battery is the only source of power.
- It’s not all-electric. There’s a small gasoline motor that drives an electric generator, which then generates power to run the electric motor. While this “extends” the Volt’s range to 340 miles, it uses gasoline to do so. Perhaps the nameplate on the car should switch from “Volt” to “Gas” when that occurs. Lipstick on a pig, anyone? Isn’t it the point for us to get off fossil fuels? Granted, using a Volt will reduce your usage, but not by a significant amount. How much better are Volt customers going to feel if they’re still pulling up to the pump?
- The battery pack is smaller than the LEAF’s, weighing in at 16 KW. It can only power the Volt for 40 miles.
Battery warranties will certainly be a competitive issue as the electric vehicle industry continues to evolve.
And as for the price? With federal tax incentives, the LEAF I have on order will be somewhere around $25,280. Pricing for the Volt has yet to be announced.
Regardless, I’m planning to stick with the LEAF… and bypassing the pumps.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.