NASHVILLE -- Sales of Nissan's Leaf electric vehicle plummeted by a third in May from a year ago -- and more problems are coming.
Atlanta, which Nissan has identified as the Leaf's hottest market, faces a steep falloff in demand after July 1 when Georgia's up to $5,000 state tax credit for EV purchases disappears.
Scott Middleton, sales manager at Town Center Nissan in Kennesaw, Ga., northwest of Atlanta, says he expects his monthly Leaf sales to drop to five to eight starting in July from about 100 now.
"It's going to drop like a cinder block off the side of a boat," Middleton says.
Nissan also faces a wave of Leafs coming off lease with diminished resale value. The company has begun offering Leaf lease customers a $5,000 credit toward buying their cars at the end of their lease period.
"There will be some takers for the $5,000, but we don't expect it to completely turn things around," says Fred Diaz, Nissan senior vice president for U.S. sales, marketing and operations. "It's just a way to offer them something."
The immediate problem for Nissan's campaign into battery-powered cars is the low price of gasoline in the United States.
Nissan has tackled one challenge after another in launching and marketing the Leaf. Among them: educating consumers on the new technology, pressing cities and power companies to invest in public charging stations, and assuring skeptics that the lithium ion battery-powered Leaf was a long-term solution to escalating regulatory demands for zero-emission transportation.