Why is the Nissan Leaf a pricey proposition?
So yesterday, Nissan Philippines, Inc. (NPI) finally made good on a 2-year old promise: that they will launch the Leaf battery electric vehicle in the Philippine market.
Delayed as the move may be, Nissan was being very bold with the Leaf. They launched it without any legislative or government support, nor any kind of widespread public charging infrastructure.
Now you've read all about the car already. It's a 5-door hatchback that runs purely on electricity with a 40 kWh battery under the vehicle. It has 150 PS and 320 Nm of torque, it can be driven just by modulating the accelerator pedal, and it has a claimed range of 311 kilometers.
Still, there is one question that needed to be answered: Why is the Nissan Leaf so expensive?
At PHP 2,798,000, the Leaf is not something we would remotely describe as affordable. Actually, it's a difficult proposition; you have to really be committed to driving an electric vehicle to honestly consider it.
Earlier this afternoon Atsushi Najima, Nissan Philippines president, gave us an answer as to why. Actually, it was a three-pronged answer.
The first is that the technology is very new in our market. Some would argue that there are lots of e-bikes and e-scooters in the Philippines, but engineering an electric car is an entirely different proposition. So there's the cost of that.
The second is the production costs of such technology, the primary cost being the battery. The Leaf runs on lithium-ion (Li-Ion) batteries, not nickel-metal hydride (NiMH), and the cost difference is very significant. As to how much, Najima didn't elaborate.
The third, and perhaps the most significant, are the costs of importation particularly taxes and duties. Now the Leaf -being an electric vehicle- is fully exempted from being subject to excise taxes under local tax laws, but it is subjected to the full 30% import duties.
Despite being a Japanese made vehicle, it doesn't qualify for JPEPA 3.0L+ import duty break because it has no engine. There are no substitutions under JPEPA that can qualify to give the Leaf a break.
Basically, the Leaf (and vehicles like it) need significant government support to become affordable. We have no electric or alternative vehicle law that gives such vehicles tax breaks or benefits. Other countries have laws that make zero-emission EVs and low emission hybrids more attractive to consumers. We don't.
What Nissan wants to highlight is the much lower maintenance costs of a Leaf. Najima says the Leaf is 20-25% cheaper to maintain than a similar sedan.
What is also interesting is that Nissan says a full battery charge will cost just PhP 360 based on current Meralco prices. Considering the range, that is very cheap versus a gasoline or diesel counterpart on a per-liter basis. Najima also says that Nissan EV Dealerships will have chargers (either fast or wall chargers) that can serve your Leaf with a full battery, and it will be free of charge.
If the government comes up with legislative support that reduces or removes duties, Najima says they will lower the Leaf's price accordingly. At PhP 2,798,000 for a Leaf, we might not see too many on our roads. But if the government can find a way to support the Leaf, then we might just see much more of these cleaner and quieter cars on our streets.