Japan quake threatens to delay U.S. output of Nissan Leaf EV

The March 11 earthquake in Japan could force Nissan to delay the start of U.S. production of its Leaf electric vehicle, now scheduled for late 2012.

“The earthquake is putting us in a very difficult situation,” said Hideaki Watanabe, head of Nissan's Global Zero Emission Vehicle Business Unit. “But we are not giving up yet. Is there a potential for delay? There may be. We are assessing right now.”

Watanabe said Nissan is seeking ways to minimize the lead time.

The Nissan Leaf is planned for production in Smyrna, Tenn., starting in December of next year. Production of lithium ion batteries for the Leaf is slated to begin in Smyrna in September 2012.

Nissan is already coming under growing criticism in the United States for slow deliveries of the Japan-produced Leaf. The company said the delays occurred because of technical problems and communications issues -- made worse by the March 11 earthquake and tsunami in Japan.

Watanabe said the earthquake and tsunami shook up Nissan's internal timetables.

“On March 11 every operation stopped so all the resources that were in place were used to restore Japan,” he said. “All the milestones and studies to localize production in the United States were stopped.”

He declined to speculate on how long the start of production could be delayed.

Tennessee plans

Nissan plans to install capacity to build 150,000 Leafs annually in Tennessee.

Company officials have said they expect to deliver 10,000-12,000 Leafs in the United States in 2011. Nissan has so far taken about 7,000 orders for the vehicle and expects to fill them by the end of summer. It is taking orders in California, Washington, Oregon, Arizona, Tennessee, Hawaii and Texas.

This summer Nissan will begin accepting orders in Virginia, Maryland, North and South Carolina, Georgia, Florida and Alabama. Nissan's goal is to be selling in all 50 states by the time production begins in Smyrna.

Leaf production in Japan was slow even before the earthquake.

“We decided to have a conservative ramp-up,” Watanabe said. “We didn't want to ramp up just because the market was excited. Quality is our priority.”

Capacity installed in Japan for one year is 50,000.

Watanabe said Leaf production is not yet back to full capacity.

"I'm asking the manufacturing team to come back to that cycle time," he said. “We're not there yet but we are improving every day very dramatically."

By Richard Johnson- Automotive News