Nissan’s revamped Leaf competes head to head with Tesla’s Model 3

In 2018, Nissan plans on releasing another version of the Leaf which will have a driving range of “more than 300 miles”

In a significant development that underscores Nissan Motor Co’s efforts at stimying criticism over its limited driving ranges in its EV offerings, the company has launched a revamped version of its Leaf electric vehicle on Wednesday.

This launch places the Leaf head-to-head with Tesla Model 3. It will be available for sale in Japan from October 2, and elsewhere from early next year.

As per an estimate by a U.S. regulator, the new Leaf has a range of about 150 miles (241 kilometers) on a single charge. This is up from its predecessor’s 107 miles driving range, thanks to its 40 kilowatt hour (kWh) battery.

At the launch, Hiroto Saikawa, Nissan’s Chief Executive disclosed that in 2018, the company would be launching a model with an even bigger battery of 60 kWh, which will give it a range of “more than 300 miles”.

Saikawa did not disclose which standards were used to calculate the distance.

Recently Tesla has launched its mass market luxury sedan, Model 3, which boasts a driving range of 220 miles and has an affordable base cost of $35,000.

According to industry experts, an EV which boasts a driving range of over 250 miles and has a price tag of around $30,000 would bring about a significant shift in the EV market. Nissan’s 2018 model of the Leaf meets this criteria.

Nissan aims to sell at least 90,000 new-model of the Leaf annually, effectively “doubling, or even tripling” the sales of its predecessor, which topped 47,000 last year.

Prices in Japan will start from 3.15 million yen ($28,992).

“If it’s successful, the Leaf will be a major part of the portfolio of Nissan,” Saikawa said. “EVs will no longer be a niche product.”

Japanese version of the new Leaf features automated functions including single-lane highway driving and self-parking, along with its combined accelerate and brake “e-pedal”.

Nissan will continue to use lithium-ion batteries from Automotive Energy Supply Corp, a battery maker with which it had a joint venture with NEC Corp but has since sold its business to GSR Capital, a Chinese investment firm last month.

Despite these major improvements, analysts say the driving range of electric vehicles needs to be improved to pull more sizable number of drivers into the segment, especially in the U.S. where gasoline prices have hit their historically low.

“Until we see a significant improvement in range and/or economics that feed through to a rise in gasoline prices, EV buyers will be buying for environmental or altruistic reasons,” said Janet Lewis, head of Asia transportation research at Macquarie Securities. “It’s still a very, very niche market.”

Nissan was one of the first automakers to mass market an EV in 2010 with the first Leaf, which has gone on to become the world’s best-selling all-battery car.

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