The Journal The Authority on Global Business in Japan

DIVERSITY | ENERGY-EFFICIENT CARS

AUGUST 2014

Driving Green
Zero-emission vehicles are becoming more affordable

By John Ghanotakis, Amir Khan, and Timothy Trahan

The future of zero-emission vehicles has truly arrived, as many attendees of the October 2013 ACCJ event at Nissan Motor Co. will testify. Members of the Young Professionals Group (YPG) Subcommittee are more concerned than ever about the environment and going green, so this month we examine the practicality of buying and/or owning an electric vehicle (EV).

With purchase prices starting at around ¥2.5 million, these cars are now in the “affordable” range of many environmentally conscious young people.

To obtain a broad perspective on the issue, we put some key questions to two people in the know: Robert Lujan, head of EV sales at Nissan, and Ronald Haigh, project manager at Toyota Motor Corp.

How costly is it to maintain and repair an EV, and how long do the batteries last?

Lujan: The total cost of owning an EV, such as the Nissan Leaf, is lower than that of a comparable ICE [internal combustion engine] vehicle. Driving a fully charged Leaf 150–200 kilometers [average range on a single charge] costs as little as ¥300 for electricity [cost of a full single charge], while a comparable ICE vehicle would cost up to five times as much in gasoline. Additional savings and benefits, such as dedicated driving lanes, free parking, and other perks are also available in numerous markets across the globe. Most importantly, periodic maintenance costs are much less than comparable ICE competitors.

Haigh: The batteries are covered by a five-year warranty, which is the same term as for a vehicle engine. We don’t expect our customers to have to change the battery over their period of vehicle ownership.

How safe are batteries in the event of a crash or malfunction?

Lujan: We have conducted extensive testing to ensure the safety of batteries. For example, all high-voltage parts are protected with insulated materials, reducing the potential for any direct contact with a driver. As an added safety feature, the system will shut down all voltage immediately if there is a short circuit or disruption.

Haigh: We use a lithium-ion battery in the seven-seat version of the Prius, the Prius Plug-in Hybrid, and the eQ, a limited-lease vehicle. Primearth EV Energy Co. and Panasonic Corporation are the suppliers that design our lithium-ion batteries to be inherently safe. We have verified that no problems such as over-heating, melting, or fire have occurred.

What is the availability of charging stations around the world?

Lujan: At the end of May 2014, there were over 4,000 quick-charge units [where drivers can get an 80 percent charge in just 30 minutes] available globally, with another 50,000 standard chargers [for home or outside use, best used for charging overnight] providing supplemental coverage. This coverage will continue to improve as new initiatives in Japan and the United States make progress toward increasing the number of charging stations available to the public.

Haigh: Honda Motor Co., Ltd., Nissan, Mitsubishi Motors Corp., and Toyota have joined with the Development Bank of Japan to create a limited liability company called Nippon Charge Service. Major chains, such as convenience store operators, private highway operators, municipalities that operate or own roadside rest areas, hotels, and Japanese inns may apply to have Nippon Charge Service install and maintain charging stations. The initial goal is to install 8,000 normal chargers and 4,000 quick-charge units over an eight-year period.

How do you dispose of old EVs?

Lujan: The Nissan LEAF has realized 99% recycle capability based on the ISO22628 [calculation method for recyclability and recovery of road vehicles]. Specifically, EV-unique parts—such as the battery, motor, and inverters—are developed to be 100% recyclable.

Haigh: The key is to recycle or reuse the batteries. Toyota has progressed to the point where we can use 100% of the battery materials to make new batteries.

Do you see the cost of EVs going up or down in the future?

Lujan: Nissan continues investing in research and development of battery performance improvements and cost reductions, as these are key to further enhancing the attractiveness and competitiveness of EVs.

Haigh: What makes EVs so expensive is the batteries. As high volume, mass production and design, and manufacturing innovations are applied, the cost of the batteries will go down. Consider that Ford Motor Co.’s Model T cost $850 in 1908 and took more than 12 hours to produce. Applying the mass-production, assembly-line method allowed Ford to bring the price down to $290 by 1924, as the line turned out one vehicle every 90 minutes.

If you had to buy an EV from a competitor, which would you buy and why?

Lujan: An EV offering from our reliance partner Renault S.A., of course! Got to keep it in the family.

Haigh: Instead of purchasing an EV, I would love to buy one of our fuel-cell vehicles. Toyota is going to begin sales in Japan before April 2015 (see box).

To follow up on this important topic, the YPG has invited both Lujan and Haigh to participate in a YPG panel discussion some time in the future, when we hope you will join us in asking more pointed questions. Please look out for further information on this event in August. •




Cars of the Future
The United States and Japan will be among the first markets to get Toyota’s new hydrogen fuel-cell vehicle in 2015 (Here is the City website, June 25).

The new cars will be priced at around $70,000, roughly the same as the Tesla Model S. Toyota plans to launch the futuristic cars before next April in Japan, followed by a US and European rollout in summer 2015.

Fuel-cell cars are receiving great support from the Japanese government, which has indicated tax breaks may be introduced for buyers. Because purely battery-powered cars are not ideal for long-distance driving due to the need to recharge, Toyota believes the automotive future is based on hybrid vehicles. Hydrogen fuel-cell cars only release water vapor, so they are more environmentally friendly than gas-powered automobiles.

John-Ghanotakis

Amir

Timothy

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John Ghanotakis (chair), Amir Khan, and Timothy Trahan (vice chairs) are members of the ACCJ Young Professionals Group Subcommittee.

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