PHOTO CREDIT: SUNPLUGGERS.COM
Chevrolet Volt production estimates
are far below those of the Nissan Leaf.

Published March 19, 2010

Nissan Motor Co.'s recent announcement that it will manufacture its all-electric Leaf for the European market at Sunderland, in North East England, has drawn much attention.

Another important announcement, drawing less attention, was that Nissan and its  partner company Renault S.A. expect to have a production capacity for all-electric vehicles of about 500,000 annually as soon as 2013. It doesn't necessarily mean they would build that many – but it appears they could.

Half a million electric cars a year from just two manufacturers is a dramatic upsizing in manufacturing capability. It means far more pure electric cars could be on the roads in Japan, the United States and Europe much sooner than many were expecting. It's almost twice the estimated sales of all hybrid models combined in the United States in 2009.

Carlos Ghosn, the head of both Nissan and Renault, who is betting heavily on plug-in cars, has been quoted as saying that the Leaf will stand alone in 2011 as the only affordable mass-manufactured electric vehicle on the market. Many may be wondering, where is General Motors?

GM executives have said that production of the Volt – a car that was featured in national advertising in 2007 – may yield about 8,000 to 10,000 cars in 2011. In 2012, production may rise to as many as 60,000 cars a year, GM has said. That would be a fraction of Nissan's anticipated capacity.

If electrified vehicles should take off, and Nissan were to leave GM in the dust, many U.S. taxpayers would surely be even more dubious than some already are about the GM bailout.  

But the race to build plug-in cars isn't over – it's just beginning.

Mr. Ghosn's company's own history in Tennessee might serve as an example of how quickly things can change.

After the sprawling Sewart Air Force Base closed in 1971, the population plummeted in the small town of Smyrna, Tenn., and prospects looked bleak. Town and regional leaders looked for ways to lure companies and jobs to the area. But progress was slow.

The 1980 election of Ronald Reagan as president filled some with hope that the malaise could be broken. But instead the country sank into a severe recession.

In 1981, the Japanese automaker Nissan began building a giant factory in Smyrna. Thousands of construction workers suddenly had jobs, and they toiled seven days a week to rush the factory into service. In record time, a plant that was started from scratch became the largest auto factory in the world under one roof.

In 1983, the first vehicles produced in the United States by a Japanese automaker began rolling off the assembly lines in Smyrna.

Similar capital-intensive projects involving other industries were also getting under way around the country, and by 1983 the U.S. economy was humming again. It already was a clear leader in the development of a new technology – computers and the software needed to operate them.

Some manufacturers even produced large, expensive "portable" computers that could be used in the home, a novelty for which hardly anyone saw any purpose. Schools, however, began buying computers, just as many today are adding solar panels to their rooftops.

Smyrna is in the news again these days, because Nissan is expanding its operations there to build the Leaf and the battery packs needed to power the car. The announcement that Nissan and Renault expect to be able to make 500,000 electric cars a year has knocked some mainstream media auto experts back on their heels. Many were declaring the electric vehicle a nonstarter as recently as six months ago.

History may not repeat itself, but it sometimes offers lessons. One may be that if plug-in cars were to gain favor very rapidly with U.S. consumers, companies could perhaps find ways to accelerate production plans. Nissan's original Smyrna plant is just one example.

The Leaf has stolen the show lately from the Chevrolet Volt, which first began appearing in advertisements and media reports about three years ago.

Whether the Volt will recover from its stall remains to be seen. But the race has hardly begun.