Carlos Ghosn is either a brilliant visionary or crazy as a loon.
The CEO of the Renault-Nissan Alliance is easily the auto industry's biggest advocate of electric vehicles, possessed of an enthusiasm bordering on fanaticism. Others may speak with louder voices, but no one is placing a bigger bet on cars with cords.
Ghosn is going all in with an investment of 4 billion Euros ($5.6 billion) in electric vehicles. That will give Renault-Nissan the capacity to build 500,000 electric vehicles and batteries at 11 factories in eight countries by 2013.
Half a million electric cars and batteries. Within two years. Most of the major automakers promise to bring an electric vehicle to market within the next few years, but Ghosn is pushing them on a scale like no other.
"There is no other car company committing the massive investment in electric cars like us. None," Ghosn said during a visit to Stanford University in Palo Alto, California, not far from where Nissan will open a tech-research center. "A lot of people are saying they’ll come out with an electric car. But they're saying 10,000 or 20,000 or 30,000 [cars]. At this time, no one can match us."
The first of those cars, the Nissan Leaf, is here. Nissan has sold 2,400 in the United States and 7,200 worldwide since its introduction in December.
Deliveries have been spotty, prompting a lot of complaints from consumers. Ghosn attributes that to hiccups at the factory and the aftermath of the earthquake and tsunami in Japan. He promises to deliver 1,500 cars this month, but Nissan is expected to deliver about 10,000 cars to the United States this year. That's far fewer than it hoped.
Still, the Leaf is the first in what will be a range of EVs from Renault-Nissan. Nissan plans to roll out three more models by 2014, while Renault will offer four by the end of next year. Ghosn clearly wants to establish market dominance early, much like Toyota did with the Prius.
The question, of course, is who's going to buy all those cars. Ghosn is unshakable in his belief that the demand is already there. He boldly predicts electric vehicles will comprise 10 percent of the global automobile market by 2020. To put that in perspective, automakers sold 72 million cars worldwide last year. His staggering prediction is well beyond anything most industry watchers are making.
"Mr. Ghosn is impressively optimistic in his forecast for EVs," said Aaron Bragman of IHS Automotive. "I think there are still a lot of unknowns in the market, and it remains to be seen where EVs will make the most sense and have the most utility."
As Bragman notes, hybrids have been around for a decade and remain a tiny fraction of the market. It's possible EVs could see a more aggressive rate of adoption, but there simply isn't enough data to offer an accurate prediction.
"No one's really sure how popular the technology is going to be," Bragman said. "You really can't extrapolate from current sales because they've only been available for a few months."
Ghosn's heard the arguments explaining why he's wrong. He's keenly aware of the technology's limitations -- limited range, long recharge times and relatively high cost. He isn't concerned by any of it. Those hurdles will be cleared, he said, and "it's an illusion" to think you can address all the problems of a technology before launching it.
Nothing he's seen, heard or read has changed his belief that electric vehicles are the future, and the future is now. We sat down with him to find out why.
Wired.com: Why are you so enthusiastic about battery electric vehicles?
Carlos Ghosn: The first reason is the technology allows it. The technology of the batteries, the technology of the motors, the technology of the other components makes it possible to have a car with a very competitive performance to internal combustion.
Number two, consider the price of oil, our dependency on oil, our concerns about emissions and the environment, the growth our industry will be going through for many years to come because of the explosion of emerging markets.
When you add up all these elements, you realize our industry is not going to be able to continue to prosper unless we embrace technology that is independent of oil and respectful of the environment.
Wired.com: Is Nissan still committed to a commercial fuel cell vehicle?
Ghosn: Our whole approach is zero emissions. We are still testing and developing fuel cell cars because we believe we can't have our zero-emissions approach based on one technology. Frankly, I don't know, in 15 or 20 years, what will be the dominant technology. Fuel cells are a very promising technology, and we are working on it. But for the moment, we are going for [battery] electric vehicles.
Wired.com: You’ve said electric vehicles will comprise 10 percent of the global automobile market by 2020. That’s a remarkably optimistic figure.
Ghosn: I know.
Wired.com: And?
Ghosn: I gave this statistic two years ago, and a lot of people said, "He's a dreamer. It's never going to happen." But little by little, people's numbers are moving up. People who were saying half a percent, 1 percent, 2 percent then are now saying 5, 6 percent. It's moving up.
Yes, it will be slow at the beginning. But then you’ll see it increase quickly. In 2010, 72 million cars were sold worldwide. Of those, 20,000 were electric cars. This is the starting line.
Wired.com: Renault-Nissan plans to have a global production capacity of 500,000 cars and batteries annually by 2013?
Ghosn: Yes. This is an investment we've already made.
Wired.com: What makes you think the demand will be there?
Ghosn: That is a lot of cars, I know. But look at our statistics in the United States. I've got more than 350,000 hand-raisers for the Nissan Leaf. More than 22,000 reservations. In June I'm going to deliver 1,500 cars. It's a great start.
In Japan, we've got very good development of the business. We're going to begin marketing and selling electric cars in Europe [through Renault and Nissan]. And at the moment we have one car. The challenge will be ramping up production, not looking for consumers. The consumers are coming. They're here. They're interested.
Wired.com: What are the challenges to the adoption of electric vehicles?
Ghosn: We have three challenges. The first is technical -- improving the batteries, improving the motors. There are a lot of pieces of new technology coming into the car. We're starting with very good performance, but we're far from the potential of the technology. The second is getting the [charging] infrastructure. The third element is [design]. In terms of design, we're going to see revolutionary electric cars coming. Design will be completely different with the next generation of electric cars.
Wired.com: Can you give us a glimpse of that?
Ghosn: Cars have a large engine in the front and you have a gearbox, which is cumbersome. Electric cars don't have this problem. The motor is much smaller, the battery is below you. This will allow you to play with different shapes.
Wired.com: The Nissan Leaf has an EPA-certified range of 73 miles. A lot of people say that isn't enough for them. How do you confront the issue of range anxiety?
Ghosn: This is a real challenge for us. We're going to overcome it in different ways. The first is, obviously, increasing the range of batteries as much as possible. The second, which is important, is developing quick intervention systems like we're testing in Japan. You have a problem, you call for help, you have a truck come with a quick-charger to charge you up and you continue on your way. The third element is deploying quick-chargers everywhere. People aren't anxious because the range isn't so big. They're anxious because they don't know where to charge.
Wired.com: How important is Better Place to your zero-emissions strategy?
Ghosn: It is important because Israel has been among the first countries to adopt very significant and aggressive measures to support electric vehicles. Shimon Peres contacted me in 2007 and said, "My dream is to have electric cars everywhere in Israel. I know you are developing the technology. What does it take? Tell me what you want, and discuss it with [Better Place founder] Shai Agassi."
All of the experiences we've had have been very positive. We're very optimistic about the development of electric cars in Israel. That's going to help a lot in countries like Denmark that are working with Better Place.
Wired.com: Why not adopt swappable batteries in models beyond the Renault Fluence ZE you've developed for Israel?
Carlos Ghosn: We want to make sure we develop different technologies and see what the market ends up selecting. In the case of Israel, the swap system has been adopted because Israel has agreed to make the investment necessary to install the battery swapping stations. It's a significant investment, and the Israelis are willing to make it.
Wired.com: Speaking of investment, what role do government incentives and subsidies play in the adoption of electric vehicles?
Ghosn: This is very important for starting up the technology. It's not very important for the sustainability of the technology. The reasons we're interested in the incentives at the beginning is to get to scale. Everyone understands in our industry that if you can’t get to scale in terms of production, it’s difficult to compete.
We want to get to 500,000 cars as soon as possible so it cuts the costs of the battery and we begin to compete with our own combustion engines. If we don’t get to scale, that’s very difficult. That’s why we’re preaching as much as possible to the different governments that we need these incentives -- not for some everlasting period, but at least for the first two or three years to help us get to scale.
Wired.com: So how much longer will the technology need subsidies?
Ghosn: In my opinion, until the industry reaches 1 million electric vehicles a year.
Wired.com: For all the talk of electric vehicles, internal combustion will remain dominant for the foreseeable future. What is Nissan's position in the debate over increasing the Corporate Average Fuel Economy standards? There is a push to go as high as 62 mpg.
Ghosn: We don’t have an official position. Today, we can envision new standards because of new technology, not just electric vehicles and plug-ins but also existing combustion engines. Gasoline engines, diesel engines are getting more and more efficient. We know the trend is more fuel efficiency and lower carbon emissions, not only through breakthrough technology but also through our existing lineup.
When I say 10 percent of the market by 2020 will be electric vehicles, that means 90 percent will continue to be combustion engines. We need to continue to invest in this technology.
Photos: Nissan. Lead photo: A Nissan Leaf rolling down the line at the Nissan factory in Oppama, Japan.
