Nissan to Launch New Budget-Priced Leaf AEV

Nissan Motor Company has announced that it will launch a budget-priced variant of its Leaf AEV in an effort to bolster lackluster sales.

The new model will be launched in 2013, and will be built at the company’s Smyrna, Tennessee production facilities beginning in December.

During the first nine months of this year, Nissan only sold 5,212 Leafs in the U.S., down from 7,199 units during the same period last year. The automaker has a sales goal of 20,000 Leafs this fiscal year.

The primary reason for the slump in sales appears to be competition from the Toyota Prius plug-in electric model and the Chevrolet Volt. With a sticker price of $36,050, and a federal tax credit of $7,500, the two currently available Leaf trim levels are less expensive than the Prius, but more expensive than the Volt.  Nissan has not announced pricing for the new model.

Moving production of the Leaf from Japan to Smyrna, Tennessee has been a critical part of Nissan’s game plan to lower cost for the past two years. The automaker also plans to bring production of the Lear’s lithium-ion batteries in-house to further lower costs. The Smyrna plant reportedly has the capacity to produce 200,000 battery modules annually.

The new Leaf will also be re-engineered to deliver additional cost savings.  Some of the electric drivetrain components located in the rear of the current models will reportedly be integrated with systems in the forward engine bay of the entry-level Leaf.  Other sacrifices will include modifications to the new model’s navigation system and lower-cost headlamps.

Some have expressed that the new model with achieve Nissan’s goal of boosting Leaf sales. They point out that the majority of Leafs sold in the U.S. since its introduction in 2010 have been high-trim models. Nissan is counting on the wider adoption of electric cars to create a greater demand for more affordable models.

In stark contrast to declining Leaf sales, GM has reported that the Chevrolet Volt set a new monthly sales record in September as U.S. consumers purchased 2,851 units – a 294% increase over the same month last year.

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