The Falling Leaf

The price of the Nissan Leaf fully electric car has been reduced by $6,500 or about 18% of the manufacturer’s suggested retail price (MSRP).  Nissan claims this is because the Leaf will now be produced in Smyrna Tennessee rather than in Japan and there will be savings using US labor in the shiny new factory Dr. Chu loaned Nissan.  Actually the price drop is a desperate attempt to keep the Leaf on the Tree of Life and not become a fallen leaf air blown into a large black Hefty garbage bag.

Funny how most if not all air blowers are still gasoline powered and very noisy.  Here in California a good fraction of the “gardeners” who blow leaves around gardens in upscale homes don’t really care about the Nissan Leaf or the Tesla they just worry if their 20 year old Toyota Pickup with 300,000 miles on the odometer they use for their “Mow and Blow” business will not conk out.  These immigrant businessmen know that the internal combustion engine works.  It works on their leaf blowers, lawn mowers, and old pickup trucks.  They do not need Dr. Chu’s money to keep them going, unless Dr. Chu is a Plastic Surgeon and lives in Beverly Hills.

When Nissan drastically lowered the MSRP of a new Leaf they blew away the value of a used Leaf.  The few poor schmucks who bought the old Japanese model saw their Kelly Blue Book (KBB) value drop like a stone.  I checked kbb.com on the retail price of a 2011 Leaf with 3,500 miles and it is about $19,500 at the Infinity dealership 5 miles away.  This is half the original price of the fully electric car when it was new 18 months ago.  The plug in car has all of 3,500 miles as the device has short range and the owner probably had a real second car.  Amortizing the lost $19,500 over the $3,500 miles we have a cost of $5.57 per mile simply for the lost value. 

Interestingly the Chev Volt which has an internal combustion engine to provide it full range and only uses the batteries for a small fraction of its driving has not had a MSRP decrease.  An 18 month old used Volt with 20,000 miles still retains approximately 85% of its original value.   There is no doubt it was dumber to buy a Leaf than a Volt, 18 months ago.   The owner of the Volt should have bought a Chevy Cruze and done better, therefore I will not applaud the Volt’s owner for being a Rhode’s Scholar but at least they are not as dumb as the schmuck who bought a Leaf.  The dumbest guy in the entire group early adopters in the electric vehicle space is the person who bought a Coda.  To guess the loss on a Coda you need a special decoder.

As for Dr. Chu he claims “he is still standing” when asked if he accomplished anything in his first term as secretary of energy.  Yeah Stevie you are making Custer’s Last Stand in the electric vehicle space.  You gave Nissan $1.5 billion for the Leaf and its associated lithium ion battery factory there in Smyrna.   I wonder if Boeing has asked you to solve the pyrophoric problems of their lithium ion battery?  My suggestion to Boeing is to pull out all the lithium ion batteries in the Dreamliner and replace them with heavier and larger nickel metal hydride batteries.  It may waste some space and require a little more jet fuel per trip but at least you will have a fleet of planes that are allowed to fly.  The FAA  may actually be the federal agency that tells us the truth about lithium ion batteries.