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Electric DeLorean Foretells Hurdles for Ghosn’s Nissan Leaf Car

By Makiko Kitamura and Megumi Yamanaka

Aug. 25 (Bloomberg) -- In the 1985 movie “Back to the Future,” Christopher Lloyd has trouble fueling his DeLorean car after altering it to run on plutonium. Today, Tomoyasu Fujii has the same problem after converting his DeLorean to electric power.

“My biggest headache is that the parking lot in my apartment complex doesn’t have a power outlet,” said Fujii, 39, an advertising salesman at a Hiroshima newspaper, adding that the building manager won’t install a socket. “Since no one else has an electric car, they don’t see why they have to bother.”

Fujii’s 1981 DMC-12 has a lithium-ion battery that takes four hours to charge, so he only drives it on weekends and recharges it at a local workshop. That’s also a hurdle for Nissan Motor Co. Chief Executive Officer Carlos Ghosn, whose electric Leaf, unveiled this month, joins battery-powered designs from Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd.

Nissan’s Ghosn estimates that by 2020, electric vehicles will make up 10 percent of the market -- about 65 million units last year. Lack of fast-charging stations on roads and at home is one of the key challenges makers must overcome.

“Infrastructure, along with pricing, is a critical issue that the popularization of the electric car hinges upon,” Mitsubishi Motors’ President Osamu Masuko said at the launch of the company’s i-MiEV electric car in June.

$109,000 Roadster

The Japanese carmakers join California’s Tesla Motors Inc., whose $109,000 Roadster is the only electric car sold in the U.S. approved for highway use. More battery-powered models are on their way as governments implement stricter C02 emissions regulations and seek to reduce dependency on fossil fuels.

Toyota Motor Corp., the world’s largest carmaker, plans to introduce an electric car in 2012 and General Motors Co. aims to start selling the Chevrolet Volt by November 2010.

“Governments and municipalities around the world are establishing strategic partnerships with us to develop the infrastructure and public acceptance necessary to make zero- emission mobility commercially successful,” Ghosn said at a press event for the Leaf on Aug. 2.

Ghosn’s market forecast is too optimistic, according to Ashvin Chotai, managing director of Intelligence Automotive Asia Ltd. in London. Even with competitive pricing, higher gasoline prices and adequate charging stations, demand may reach only a few million units by 2020, he said. Auto consulting company CSM Worldwide predicts global electric car production will only reach 289,000 units by 2015.

Nissan fell 1.6 percent to 678 yen at the close of trading in Tokyo. The stock has more than doubled this year.

Previous Flop

Previous attempts to popularize electric cars have been thwarted by inadequate infrastructure and the cost of production. Toyota sold only about 1,900 electric RAV4 sport-utility vehicles between 1997 and 2003 in the U.S. and Japan.

“Costs have come down and now we are entering an era of mass production,” Chotai said. “But there are a lot of uncertainties to iron out before things really start to take off.”

One is range. Typical gasoline-powered cars run for 300- 400 miles (480-640 kilometers) on a tank of gas. The i-MiEV and Leaf are limited to about 100 miles on a full charge and running the air conditioner can cut the i-MiEV’s range to 62 miles. Fuji Heavy’s Stella can go about 56 miles. (Fujii’s DeLorean stops after about 30.)

The carmakers say these ranges are adequate for daily use by urban commuters.

Also, electric cars are more expensive, mostly because of the lithium-ion battery. The i-MiEV is priced at 4.6 million yen ($48,300) and the Stella at 4.7 million yen. Toyota’s third- generation hybrid Prius, which uses both battery power and gasoline, starts at $22,000.

Battery Cost

Ghosn hasn’t announced the price of the Leaf, only saying that it will cost about the same as an equivalent gasoline- powered car. That excludes the battery, which the consumer will pay for in monthly installments that Nissan says will be less than the equivalent cost of gasoline, even with crude oil at about $60 a barrel. Crude traded at $72.01 a barrel in New York yesterday.

Meanwhile, Toyota, Nissan and Fuji Heavy are researching a more powerful battery.

“At the moment, electric cars are lagging hybrids,” Chotai said. “At some point, if there is a breakthrough in battery technology or aggressive government incentives, then it’s possible they could overtake hybrids.”

To charge-up a battery car, there are two options: Plug it into a domestic socket for six to eight hours, depending on the model, or connect to a more powerful “quick-charger” that can take as little as 15 minutes to replenish the battery 80 percent.

Earlier this month, the three Japanese electric carmakers and Tokyo Electric Power Co., the nation’s largest utility, set up a committee to plan a national network of standard quick chargers, “indispensable to the popularization of electric cars,” they said in a joint statement.

Sweating and Praying

Keisuke Tanaka discovered that while driving one of eight i-MiEVs owned by his company, convenience store operator Lawson Inc. During the first few days, Tanaka found himself staring at a red-flashing gauge indicating a nearly dead battery.

With still a few of the eight stores he supervises to visit, he had to drive back to his office, sweating and praying the car would make it.

“I realized then I need to have a more regular routine for charging the car,” he said.

Japan’s Ministry of Economy, Trade and Industry budgeted 300 million yen this fiscal year to subsidize installation of charge stations, halving the 3.5 million yen ($37,000) cost of a quick charger.

Quick Chargers

Tokyo Electric, which plans to buy 310 electric cars this fiscal year, has installed 38 quick chargers in the Tokyo metropolitan area, of which 11 are available to non-employees.

Nippon Oil Corp., Japan’s largest oil refiner, will set up quick chargers at 22 filling stations nationwide, starting in October, as an experiment to gauge demand.

Nissan also plans to install chargers at dealerships. Outside Japan, it has partnered with U.S.-based Electric Transportation Engineering Corporation (eTec), which will install 12,500 220-volt chargers and 250 quick chargers by mid- 2011 in cities in Arizona, California, Oregon, Washington and Tennessee.

Nissan is working with China’s Ministry of Industry and Information Technology and the government of Wuhan city to develop a network of charging stations, it said in April. The carmaker and partner Renault SA aim to sell electric vehicles in China in 2011.

Kouzo Abe, chief of the Japanese trade ministry’s environment and automobile division, said the charge stations would provide users with a back up.

“People might feel more at ease if charge spots dotted the landscape, but if we build too many, they could end up facing the same fate as public pay phones,” he said. “Charging for the most part will take place at home.”

Fujii doesn’t have that option. He omitted both heater and air conditioner from his DeLorean because they drain the battery too fast.

“In the winter, I’ll carry a hot-water bottle on my lap to keep me warm,” he said.

To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net

Last Updated: August 25, 2009 04:37 EDT

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