U.S. Production of Leaf AEV May be Delayed by March 11 Earthquake

U.S. production of the Nissan Leaf all-electric vehicle may be postponed due to the devastating March 11 Japan earthquake and tsunami according to company officials.

Nissan had planned to launch the Leaf in North America late next year, but the company’s head of Global Zero Emission Vehicles business division Hideaki Watanabe said, “The earthquake is putting us in a very difficult situation.” Watanabe said Nissan is exploring ways to reduce the lead time and added, “We are not giving up yet. We are assessing right now.”

Nissan’s U.S. production of the Leaf is currently slated to begin in December 2012 at the company’s Smyrna, Tennessee plant. The company hopes to begin producing the vehicle’s lithium-ion batteries at the facilities in September of next year. When fully functional, the Smyrna plant will reportedly have the capacity to build 150,000 Leafs per year.

Disruptions in manufacturing and shipping, caused by the earthquake and tsunami, have heightened criticism of the company which was already experiencing backlogs of Japan-produced Leafs in the U.S. prior to March 11. The company said those delays were due to technical and communications issues.

Watanabe said, “On March 11 every operation stopped so all the resources that were in place were used to restore Japan. All the milestones and studies to localize production in the United States were stopped.” He did not speculate on how long the U.S. production delay could be.

Last year the company began taking orders in Arizona, California, Hawaii, Oregon, Tennessee, Texas and Washington and has received approximately 7,000 orders to date. The company expects to complete delivery of those orders in August.

Later this summer, Nissan will begin taking Leaf orders in Alabama, Florida, Georgia, Maryland, North and South Carolina and Virginia. The company is projecting that it will receive between 10,000 and 12,000 orders from the U.S. by year’s end.

Nissan plans to be taking orders from all 50 states by the time production commences at its Smyrna plant.

Watanabe said Nissan was taking a cautious approach to Leaf production, even before the March 11 quake. “We decided to have a conservative ramp-up,” he said. “We didn’t want to ramp up just because the market was excited. Quality is our priority.”

Annual production capacity for the Leaf in Japan was 50,000 units prior to the earthquake. Watanabe said the company is not yet back to full production capacity but added, “I’m asking the manufacturing team to come back to that cycle time. We’re not there yet but we are improving every day very dramatically.”

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