Mitsubishi Motors' electric dreams

If Mitsubishi Motors chief Osamu Masuko is unduly concerned about slumping auto sales in the U.S., Japan, and Europe he wasn’t showing it at a media lunch in Tokyo today.

While realistic about the current global economic situation and its impact on auto sales, he emphasized the progress made at the automaker since its painful divorce from DaimlerChrysler three years ago, which followed recall scandals in Japan and a disastrous incentive scheme in the U.S. The carmaker probably wouldn’t have survived if it wasn’t for a $2.6 billion lifeline from other Mitsubishi keiretsu partners.

In the year through March this year, Mitsubishi had its best ever year for operating profits and its employees no longer believe the company is on the verge of collapse: when Masuko took over as president in January 2005, the company had been losing 70-100 employees a month from its development division alone, he said. Masuko also laughed off a question that Mitsubishi is better placed to weather the U.S. downturn because it sells so few vehicles these days.

But perhaps of most interest is that Mitsubishi will be the first Japanese automaker to begin selling an electric vehicle when it launches the i-Miev next summer. Based on the popular i minicar, the i-Miev can be recharged at home, promises a range of 100 miles and no C02 emissions (Taking into account the C02 produced to generate the electricity, Mitsubishi reckons the i-Miev, in Japan, emits 28% of the C02 of a gasoline equivalent). Running costs will be either 1/3 or one 1/9 of the gasoline version depending if charging is done at day or night. Sales will start in Japan only but exports are expected from 2010.

Reports in Japan suggest the car could initially be between a pricey $23,000 and $28,000, although the figure is expected to drop as production increases from an initial 2,000 a year to over 10,000 a year by 2011. Given safety concerns over lithium ion batteries—not to mention Mitsubishi’s painful history of recalls—Masuko said Mitsubishi’s cells are “100% secure.” He added that using its EV know-how, Mitsubishi is also working on plug-in hybrids for longer distance driving.

Of course, such small volumes are unlikely to worry Toyota, which plans to sell a million hybrids a year by 2010s, and other larger carmakers. Still, few would begrudge Mitsubishi, which doesn’t sell a conventional hybrid, a little success after its brush with the scrapheap.