Nissan Plans to Lower Cost of Leaf's Battery Pack

Nissan is trying to cut the cost of the battery pack that equips its Leaf electric vehicle in order to make the car more competitive when it goes on sale this year.

Nissan aims to bring down the cost of the lithium-ion battery pack to less than $370 per kilowatt-hour to make a profit from the Leaf.

Compared to the Japanese government estimate of $1,600 per kilowatt-hour, Nissan’s aim could be seen as over-optimistic. But the company aims for even lower costs.

“Our target is a lot tougher” that $370, Masahiko Otsuka, president of Automotive Energy Supply Corp. was quoted as saying by the Automotive News. The company is a joint venture between Nissan, NEC Corp. and NEC Tokin Corp. and is in charge of making the battery for Nissan.

The lithium-ion battery is the most expensive component of the Leaf, representing about $9,000 of the fully-electric car's price. As announced by Nissan, the Leaf will retail for $32,780 in the US, excluding government incentives. Nissan’s battery currently costs about $472 per kilowatt-hour, according to Takeshi Miyao, an analyst in Tokyo at auto consulting company Carnorama.

Nissan plans to spend 430 billion yen ($4.65 billion) in research and development during the current fiscal year ending in March 2011.

Nissan’s CEO Carlos Ghosn said he aimed to have the capacity to build 500,000 electric cars a year by 2012, estimating that demand will reach 10 percent of the global car market by 2020. Nissan and partner Renault plan to build electric cars at plants in the UK, Japan, France, Portugal and the U.S. state of Tennessee.