Don’t wait – your gift will be doubled for a limited time.  Give Now

Car companies are happy to lose money on electric cars

Stacey Vanek Smith Jul 28, 2014
HTML EMBED:
COPY
 A Nissan Leaf electric vehicle is displayed at Star Nissan on December 3, 2012 in Niles, Illinois. Scott Olson/Getty Images

Car companies are happy to lose money on electric cars

Stacey Vanek Smith Jul 28, 2014
 A Nissan Leaf electric vehicle is displayed at Star Nissan on December 3, 2012 in Niles, Illinois. Scott Olson/Getty Images
HTML EMBED:
COPY

Nissan reports its second quarter earnings on Monday. The company has been one of the pioneers in the electric car business with its Leaf. The Leaf is one of the most critically acclaimed electric cars out there, but the business model is still up in the air.

“The cost of those batteries is still too high,” says David E. Cole, founder of AutoHarvestEstimates put the batteries between $10,000 – $16,000. They also need to be replaced every 10 years or so. Nissan is offering Leaf owners replacement batteries for $5,500, which means the company is probably losing money on those batteries.

Everybody’s working on these batteries,” says Cole. “A variety of different technologies are being explored, but the cost has just not come down the way we would like to see it.”

In fact, Nissan is probably losing money on every Leaf it sells. Still, it could pay off.  

People criticized Toyota for years for losing money on every Prius it sold,” says John O’Dell, senior editor for fuel efficiency and alternative vehicles at Edmunds.com. “And now Toyota makes a ton of money on every Prius it sells, and it also dominates the hybrid market because it was willing to invest with losses into a long term strategy.”

O’Dell estimates electric cars won’t catch on in a mainstream way for another five years.

 

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.