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Nissan Turns Over a New Leaf

Will a new Nissan lithium-ion battery plant and the zero-emissions Leaf lead to a transformation in Middle Tennessee?

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Nissan’s operations in Middle Tennessee—where the automaker is investing $1 billion to build a lithium-ion battery plant and modify its existing facility to build a mass-market electric car—are poised for a dramatic shift.

Crews are to break ground by the end of the year on the battery plant. Nissan also is preparing to modify its Smyrna facility to allow for the production of the Leaf, what the company is billing as the first family-size, affordable electric vehicle for the mass market. At full production, the plant is to build 150,000 electric cars a year and create 1,300 jobs for the region.

“This is a huge transformation,” Carlos Tavares, Nissan’s executive vice president for Americas operations, said in a recent phone interview from Tokyo. “We are going to impact all the supplier bases; we are going to impact the skills of our people.”

Holly Weber, vice president of economic development for the Rutherford County Chamber of Commerce, expects Nissan’s electric-car focus to attract suppliers to Rutherford and surrounding counties.

“I truly believe this will be a Middle Tennessee impact,” she said, noting that companies don’t “see county lines” when looking for new opportunities.

While Tavares said it’s still “a little bit too soon” to quantify the shift’s impact on regional suppliers, Weber said she expects existing suppliers to adapt.

Nissan, whose North American headquarters are in Franklin, accepted a $1.6 billion loan from the U.S. Department of Energy in June, part of $8 billion loaned to Nissan, Ford, and Tesla to encourage development of energy-efficient vehicles.

While automakers, Nissan included, offer hybrid vehicles powered by combustible engines and electric batteries, Tavares said Nissan made a decision three or four years ago to take a “shortcut” and design a zero-emissions vehicle.

“It’s a major difference to be a solution rather than a smaller problem,” he said.

Hybrids represent about 2 percent of American car sales, and profitability can be elusive.

“For any car that we launch today in the automotive industry, you know that carmakers need between five and seven years to reach their profitability objectives,” Tavares said. The Leaf will be profitable “because it’s going to be mass market. We are not only going to sell the car to ‘green addicts.’”

Lonnie Miller, an analyst for R.L. Polk & Co., a Michigan-based automotive-marketing research firm, said the Leaf will “still have a niche feel to it,” because Nissan plans to debut the car in select markets. In many cases, however, the Leaf will roll into waiting arms.

“You do have a very ravenous electric-vehicle/hybrid community out there,” Miller said.

Nissan has yet to announce pricing for the Leaf. But industry reports have priced the car in the low $20,000s, where vehicles like the Toyota Prius and several family sedans are already priced, Miller said.

“First, on the total cost of ownership, the EV (electric vehicle) will be the same or lower cost as a conventional car,” Tavares said, adding that it should also have a better residual value.

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