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If you just look at the numbers, there is something that doesn't make sense about the Nissan Leaf production facility in Smyrna, TN. After all, the automaker has been building EVs there since early this year and can make enough batteries there for over 150,000 cars a year. But, currently, the Leaf sells just 2,000 or so copies a month in the US (and all US Leafs coming from Smyrna). So why does the company have a problem supplying demand? One word: electrodes.

"We recently decided to increase production in Smyrna, but we won't see that until November or December" - Nissan's Billy Hayes

That's what we learned speaking with Billy Hayes, vice president in charge of global sales of the Nissan Leaf, at the in-depth Nissan360 event in Southern California this week. Hayes said that Nissan did recently decide to increase Leaf production – from around 2,000 a month to 2,500 – but that it just takes time before that decision turns into more vehicles out the door. "What we wanted to see was a sustained 2,000 [sales] a month and it's no secret that we're running kind of tight on dealer inventory," he said. "What people don't really understand is that yes, we have capacity but there is also a lead time because of electrode production. Between the time that we make a decision to increase production to the time it actually goes up is about six months. We recently made the decision to increase production in the Smyrna plant, but we won't see that until November or December."

The new, higher production number will itself be reevaluated in the coming months – Hayes said he is "very optimistic" it will also be moved up – but any further increase would then take another six months to implement. That means we're not going to see US Leaf sales break out of their 2,000-3,000 monthly sales levels until at least the summer of 2014. There's more below.

nissan leaf battery infographic

The Leaf's electrodes come from AESC, a joint venture between Nissan and NEC. AESC builds the electrodes in Japan and delivers them in basic form to Nissan. Then, they still need to be processed into modules in Smyrna (or, for UK production, in Sunderland) before their shelf life is up. In Japan, where around 1,000-1,500 are made each month, just like Sunderland, Nissan can adjust Leaf production a bit faster because the electrodes don't need to travel as far (it can take 30-60 days for the electrode rolls to get from Japan to Tennessee). And that is how electrodes affect Leaf sales. Hayes said:

In January and February we did like 650 and 653 in those two months. It wasn't because the car wasn't performing, it was because we didn't have any. There were no cars to sell. So we couldn't get the Model Year '13 fast enough and once we did, we've been banging out 2,000 a month, as many as we can produce. It's been a challenge. You want to put them in the markets that sell and allocate them the right way, and that's been the challenge now, to keep the momentum up.

Globally, Nissan has sold over 75,000 Leafs to date, and the company hasn't even started sales in the world's most populous country.

Leaf sales in China

"The status is that we're planning on coming out with a version of the Leaf in China next year," Hayes said. "Right now, we're going through the testing phases." That means pilot test programs in six cities with around 250 cars total. The plan is to roll out the EV in the places where people are interested and where there are favorable government incentives. Hmm, that sounds familiar.

Hayes is about to start spending a lot of time in China – his first trip there was two weeks ago – to get ready for Leaf market introduction, round four. The challenge, as before, is to go through the customer research and determine how the car should be marketed, how much it should cost and how to get dealers ready. While the Leaf will not be the first EV in China, Hayes said that the EVs that are already there, like the BYD e6, are mostly used by fleets, so the mass-market Leaf will be among the first to directly try to catch the customer's eye.

Unlike the Model S, which is getting China-specific upgrades, the Leaf will not get any major changes for the Chinese market. It may even get to keep its name. Hayes said Nissan hasn't decided what, exactly, to call the car in China but the plan is to sell it under the Venucia brand. "I'd like to call it the Leaf," he said. "It seems to make sense."


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    • 1 Second Ago
  • 17 Comments
      TurboFroggy
      • 2 Years Ago
      I knew it, I knew they were still supply constrained. I wonder why they still need raw materials to come from Japan, can't they source that stuff locally? Supply is still hovering around 2000 total Leafs on cars.com, dealers here in my area still have enough supply, however they don't seem to be able to get caught up like Volts have.
      2 wheeled menace
      • 2 Years Ago
      Wow, that's a crappy reason to hold up production.
        BraveLil'Toaster
        • 2 Years Ago
        @2 wheeled menace
        No, that's *today's* reason. Tomorrow, it will be different. And I suspect that this is the case for any auto manufacturing production increase, since all cars are hugely complex machines (yes, even the Leaf) requiring many different sources for parts. So if GM has an issue with their alternator manufacturer one month, then their production rates over the models of the vehicles that goes into will suffer. So really, we can consider this statement to be "Because part X is behind in production right now", where X is interchangeable, and pretty much irrelevant for discussion. The most enlightening part of the article I found, was that it takes about 6 months for production numbers to change after the decision is made to change them. There are many reasons why it takes that long, but it's completely expected.
        JPWhite
        • 2 Years Ago
        @2 wheeled menace
        I agree. The real reason can only be speculated at. Resale values of LEAF's has cratered over the last 12 months. Maybe Nissan's plan is to create demand for 2nd hand LEAFs so Nissan and/or the dealers don't get lumbered with 2/3 yr old LEAF's coming off lease.
        bluepongo1
        • 2 Years Ago
        @2 wheeled menace
        Well it is the Wal*mart/ Mc D's of retrofitted BEV's. ;-)
          bluepongo1
          • 2 Years Ago
          @bluepongo1
          Wow, I thought more of the trolls on Tesla threads (who can't tell a commuter car from a quality car.) were Leaf losers. -3 ?
      Spec
      • 2 Years Ago
      Hideous paint job. They should have just gone over the top and had some guns, a crying eagle, and Jesus on it. That might help improve the car's image among conservatives. ;-)
      Rotation
      • 2 Years Ago
      Still no supply problem out here where all the LEAF sales are anyway. Maybe there was in January/February 2013, as I got mine early March 2013 and 2013s were still the minority on the dealer lot. I think it's a big disingenuous to say that 2013 supply constraints hurt sales of the 2013 LEAF in January 2013 when the price of the 2013 wasn't even announced until halfway through the month. Clearly the vehicle cannot be selling out before they even give it a price and offer it for sale!
        Joeviocoe
        • 2 Years Ago
        @Rotation
        Once again... that is a self-centered way at looking at economics. What you see on the "Lot" is NOT SUPPLY... it is regional end-product availability. I wrote a whole big spiel about it already.
          Rotation
          • 2 Years Ago
          @Joeviocoe
          Joeevicoe: Let me explain to you. I am not stupid. Dealerships around here were not having problems. Not some. None. They weren't hiding their LEAFs, they were right up front, the 370Zs and NV200s were in the hiding spots. The pricing is key, that's true, because the 2012 was a lot more expensive, and yeah, as 2013s were still the minority on the lot, they weren't moving on the 2012s as much as they were a few weeks later. As to widening my view and looking at other dealerships, other dealerships don't matter. As I mentioned a few times now, these dealerships in Santa Clara county and up the Peninsula are where the highest LEAF sales are IN THE COUNTRY. Oh, you say they probably didn't have any in Walnut Creek? Who cares? In Santa Clara country I stop at a stoplight and there are 5-8 electric cars stopped at the light. Drive up to Walnut Creek and the EVs disappear. If they don't have inventory in Stockton it makes no difference as long as sales are still going in the South Bay and SF. And as I've told you many times now, there were enough cars in the South Bay and SF to sustain sales. The implication that sales are short because of supply is an attempt to mislead. The car's sales levels are quite healthy around here and they are at the level they are because of the demand level, not a shortage of supply.
          Joeviocoe
          • 2 Years Ago
          @Joeviocoe
          --" they were not offered for sale at that time" Exactly... that is why looking at availability is a fool's errand. If supply were not constrained at all, it is possible dealers would have cars available to sell... and thus, sell more. ----- A constrained supply can look like many things at the local level. Some dealerships my not get inventory until the next month... or some dealerships may want to hold onto inventory a bit longer by having sales staff not push deals or negotiate as much on MSRP. Or even push their Leaf inventory to a less visible section of the lot. They would do this because a constrained supply means any Leafs sold would not be replaced as quickly, or may require a higher dealer cost to get replacements. They may NOT simply want to raise the price for various reasons (as conventional economic theory suggests since as a dealership franchise, that has consequences). So if you widen your view and don't focus on what you see at your local dealerships... it becomes more apparent.
          Joeviocoe
          • 2 Years Ago
          @Joeviocoe
          When it was said that there was NOT a supply constraint last year.... the same reasoning you are giving now, was given. Then Smyrna started up production. Prices dropped. It turned out, the Availability of Leafs at dealerships misled people like you to believe there was no supply constraint. Learn from your mistakes.
          Rotation
          • 2 Years Ago
          @Joeviocoe
          This is the region that matters. You saw the thing about 50% of EVs are sold in just a few cities? This is one of those cities. They probably sell more LEAFs than Sentras. And while you cannot tell the sales rate by looking at inventory, you can tell whether the supply is keeping up with demand. i.e. you can tell whether 'US Nissan Leaf sales are slowed by electrode supply'. And while January and February may have been different, the impression this is trying to give that LEAF sales are low due to supply is not true at the moment, and certainly wasn't true of 2013 models in the first half of January either because they were not offered for sale at that time!
      Koenigsegg
      • 2 Years Ago
      if the leaf wasnt electric would it even be given attention?
        Joeviocoe
        • 2 Years Ago
        @Koenigsegg
        If the Prius wasn't a Hybrid, would it? Yet, here we are, Prius popular as any.
        Rotation
        • 2 Years Ago
        @Koenigsegg
        It'd be called the Versa and no, it doesn't get any attention. If the Tesla weren't electric would it even be given any attention?
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