Nissan Customers Angry Trying to Turn New Leaf: Alan Ohnsman

Nissan Motor Co. is aggravating the customers it needs most.

Nissan, which wants to become the top seller of electric cars, repeatedly delayed deliveries to some U.S. buyers who reserved the first 20,000 Leaf plug-in hatchbacks, according to interviews with customers. They said Nissan unexpectedly dropped some from the waiting list temporarily, asking that they reapply if they couldn’t prove they’d arranged installation of home- charging units that can cost more than $2,000.

“My delivery date kept jumping around, from April to ‘pending’ to May to June to July,” said Marc Fishman, a 42- year-old movie sound editor from Burbank, California. He said Nissan canceled the first order he placed, in September 2010, without explanation and gave him conflicting information after he reordered the next month.

For Nissan Chief Executive Officer Carlos Ghosn, the hitches show that the first mass-market electric car for the U.S. is a long way from being sold and delivered as smoothly as the company’s Altima sedans. Ironing out the Leaf process is a priority for the Yokohama-based carmaker to meet its goal of selling hundreds of thousands of the hatchbacks annually within the next few years to recoup an investment of more than $1 billion.

Photographer: Simon Dawson/Bloomberg

Drivers who want to own a Leaf 1are willing to invest time and money to have their homes rewired to accommodate the vehicles, something the average driver isn’t ready to do, said The Car Lab’s Noble. Close

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Photographer: Simon Dawson/Bloomberg

Drivers who want to own a Leaf 1are willing to invest time and money to have their homes rewired to accommodate the vehicles, something the average driver isn’t ready to do, said The Car Lab’s Noble.

“What it demonstrates is reality -- electric vehicles are niche products that can’t be mass-produced yet and can’t yet be sold like regular vehicles,” said Eric Noble, president of the Car Lab, an industry research company in Orange, California.

Nissan shares declined 1.1 percent to 784 yen today in Tokyo trading, compared with a 0.7 percent drop in the benchmark Nikkei-225 Stock Average.

Helicopter Fly-Over

The company expected “challenges” with its first electric car and first “built-to-order” model sold via the Internet in the U.S., said Brendan Jones, manager of Leaf sales in the country. The prospect proved true when orders were delayed due to technical glitches and communications problems, compounded by Japan’s earthquake in March that slowed deliveries of all models.

In April, Nissan began revamping the program, retraining agents who staff the vehicle’s sales website and promoting Jones, who had been a manager of general sales and marketing, to director of the same for the plug-in brand.

The first Leaf buyers, whom Jones described as more affluent and tech-savvy than typical Nissan customers, require special handling. One Californian on the waiting list was so anxious about his order that “he even got a helicopter to fly over the port to see how many Leafs had arrived,” Jones said in a telephone interview on June 3.

Lowered Expectations

“The expectation we set for our customer service agents didn’t prepare them for that level of customer inquiry,” said Jones, based at Nissan’s North American headquarters in Franklin, Tennessee.

U.S. Leaf deliveries began as a trickle late last year and totaled 2,167 through May. This year, General Motors Co. (GM) sold 2,184 Volt plug-ins, a rival rechargeable car.

Nissan anticipates getting at least 10,000 cars to U.S. drivers this year -- half the original plan for 20,000.

“I understand the frustration of some of the consumers,” Ghosn told reporters today in Palo Alto, California. “The last thing we want to do is frustrate them.”

The company will deliver at least 1,500 cars to U.S. customers, the most since the program began, Ghosn said.

Up to 100 Miles

Leaf has a base price of about $33,000 before a federal tax credit. It travels between 62 miles (99 kilometers) and more than 100 miles when its lithium-ion battery pack is fully charged, according to a U.S. Environmental Protection Agency rating.

Photographer: Tomohiro Ohsumi/Bloomberg

Nissan Chief Executive Officer Carlos Ghosn. Close

Nissan Chief Executive Officer Carlos Ghosn.

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Photographer: Tomohiro Ohsumi/Bloomberg

Nissan Chief Executive Officer Carlos Ghosn.

While anyone can reserve a Leaf for a $99 fee, for now Nissan lets people actually place orders in only seven states: Arizona, California, Hawaii, Oregon, Tennessee, Texas and Washington.

“I expected the Leaf as early as December last year, and no later than March this year, so it is disappointing,” said David Radzieta, a computer systems analyst in Hueytown, Alabama, who made his reservation in July 2010.

In Burbank, Fishman said he’s frustrated because his chance of getting a $5,000 electric car rebate from California has been put at risk. The program, funded by vehicle registration fees, may run out of money in July. While it may be renewed, regulators have proposed halving the rebate to $2,500.

“This was, frankly, an unacceptable way to treat reservation holders who’ve been continuously misled and kept in the dark,” Fishman said.

He said he hopes to receive his car by the end of the month, and is awaiting installation of a $2,250 home charger.

Rewired Homes

Drivers who want to own a Leaf, like those who leased Bayerische Motoren Werke AG’s Mini E electric car and Tesla Motors Inc. (TSLA)’s $109,000 Roadster, are willing to invest time and money to have their homes rewired to accommodate the vehicles, something the average driver isn’t ready to do, said the Car Lab’s Noble.

“These are people who’ve already signed up for some degree of sacrifice -- who eagerly await vehicles that barely go 100 miles per charge on a good day,” he said.

On Nissan’s consumer website, people thinking about owning a Leaf are guided through a “suitability analysis,” Jones said.

“It asks you, how much do you drive, do you have a garage?” he said. “Do some self-analysis before proceeding.”

Nissan stopped taking reservations in September after lining up 20,000 potential buyers. Of that group, about 45 percent chose not to continue with the process, said Katherine Zachary, a spokeswoman for the company. Reservations reopened in May and Nissan has secured more than 1,000 orders since then.

The goal is to ensure buyers wait no more than four months from order to delivery, Jones said.

Ghosn has predicted electric cars will account for 10 percent of Nissan’s global auto sales by 2020. Anticipating that, the company will open a lithium-ion battery factory in Smyrna, Tennessee, next year to make packs for as many as 200,000 Leafs and other models that will be built at its auto- assembly plant next door.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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