Ghosn Says Electric Cars Still Dependent On Government Subsidies

Generous incentives are still needed to “jump-start” sales of electric cars, says Carlos Ghosn.

In a media interview this week, the Renault-Nissan Alliance chairman and CEO gave his perspectives on the importance of government subsidies to move electric car sales forward.

“It is very difficult to make the electric car an attractive buy without government subsidies for the consumer,” he said. “So how can you support electric cars if it depends on government subsidies? We need not for an infinite period of time: just to make sure that you jump-start the sales.”

Consumer demand for these plug-in vehicles is still limited. For now, government regulations and subsidies need to drive sales forward.

“[Sales] are driven by emissions regulations, and by mainly state and company incentives, which is pushing the consumer to buy these types of cars,” Ghosn said.

Sales are thriving in global markets where “government is supporting the consumer,” he said, with China being number one followed by the U.S.

The U.S. also benefits from having federal tax incentives and state rebate programs, which differ from one state to the next. Ghosn is seeing strong sales in states with more incentive support.

China, U.S., Japan, Germany, France, and the UK all have subsidy programs in place. When asked about the potential for Australia joining that list, Ghosn doesn’t see it happening anytime soon.

“I don’t think, today, that there is anything that would lead us to think that Australia is going to see electric cars [in mass numbers anytime soon]. Usually electric cars take off when there is a country policy about supporting zero-emission transportation,” he said.

The best markets also understand that governments supporting charging infrastructure is a necessity for seeing growing public support for plug-in electrified vehicles.

Along with PEV subsidies, Ghosn said, “at the same time they are supporting communities to develop charging infrastructure, because they know if there is not enough infrastructure there’s not enough take-up.”

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Nissan executives are looking forward to rolling out the next generation Nissan Leaf this September, with longer range than the current version.

Battery technology isn’t yet at the level where budget car buyers will consider them, the Nissan CEO said. One of their main appeals, for now, is that electric cars have fewer moving parts than cars with internal-combustion engines, offering greater potential for profit for automakers.

“Electric cars, by definition, are simpler to assemble: there is nothing expensive in the technology of electric cars – [they] can be extremely competitive. But as long as electric cars represent less than half a per cent of the total industry, it’s very difficult for them to compete against 99.5 per cent of the industry, which are internal-combustion engines,” he said.

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