Nissan Prepping For The Day Federal Consumer EV Credits Begin Drying Up

With 73,392 U.S. Leafs sold out of a 200,000 unit phase-out point under federal law, Nissan is anticipating what it will do when the $7,500 federal tax credit begins to diminish then ultimately run out.

Last year alone the automaker sold more plug-ins than any other with 30,200 Leafs delivered and as it attempts to keep up that pace, the company knows a credit it can fold into leases to make them cheaper, or use as a net discount may not always be here.

According to the IRS, after Nissan passes 200,000 sales, following that quarter when this occurs, the tax credit phases out over the 15 months following and eventually Leaf buyers will not be able to claim a federal credit.

The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer¹s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (³phase-out period²). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period.

 

Just like Toyota nearly banking on an $8,000 hydrogen credit being reinstated as it launches its Mirai later this year, one thing Nissan is holding out hope for is the cap being extended.

Speaking with Wards Auto, Pierre Loing, vice president-product planning for Nissan North America said this notion is one possibility.

“One thing [we’re looking at] is to see … is there room for negotiations?” said Loing

The argument is already in place, he said to question why should Nissan be handicapped after being successful?

“Being the first ones on the market, we should be among the first ones to reach 200,000, and you penalize those who’ve tried to be first?” Loing asks rhetorically.

Whether he thinks that argument will hold water was not said. There are always at least two sides in a debate, and one could just as well say the whole reason for an arbitrary cap was to get an automaker up to speed. Now that Nissan has reaped that profit and is up to speed, would some in Congress call this tact whining or will others see a meritorious point of view?

How ever that may go, plan B would be the old fashioned way – offer a better value proposition that can still make money.

“The reduction on the cost of the battery is so important,” he said.

On the battery front, Nissan’s CEO Carlos Ghosn has already stated Nissan has a new chemistry waiting in the wings that could offer 200-plus mile range just like the new Chevy Bolt that was announced yesterday for production.

Nissan has not said more officially, but it would appear it has options. Or maybe not so much? For his part, Loing told Wards Nissan is not as far along as some think.

SEE ALSO: Ghosn: Next-Generation Leaf To Feature 200-Plus-Mile Range
Engineers at Nissan can give the Leaf more range, he told Wards, but lithium-ion battery costs are not dropping as quickly as Nissan had hoped.

“And of course, with (oil at) $47 a barrel, it makes it even more challenging,” Loing said.

Wards