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February 19, 2017 12:00 AM

Nissan Leaf finds its fan base

In key markets, savvy dealers turn a 'flop' into fortune

Lindsay Chappell
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    NASHVILLE -- Nissan's bold move into electric vehicles this decade looks like a sales flop to many. But don't tell that to Ted Christiano, executive manager of Boulder Nissan in Boulder, Colo.

    "The Leaf now accounts for 80 percent of the new cars we sell here," Christiano says. "We're doing a great business with them."

    Christiano's store is doing everything right in selling the Leaf, including reaching out to EV-friendly consumers via social media and sending sales consultants into the community to show people how an EV works.

    "I'd like to have more EV models from Nissan," Christiano says. "How about an all-wheel-drive EV?"

    Christiano is selling 200 to 300 new Leafs a year. If all 1,100 of Nissan's U.S. dealers sold that many, the automaker would have to build a bigger Leaf factory.

    Instead, the company last year sold 14,006.

    A flop?

    The difference in realities reveals something profound about the U.S. market for EVs. In the big scheme of auto sales, few Americans have embraced the notion of battery-powered personal vehicles such as the Leaf. But on the other hand, there are thriving pockets of the market where EVs are in demand.

    In Seattle, the Leaf is outselling the brand's volume-leading car, the Altima. In Kansas, Delaware, New Jersey, Minnesota and Connecticut, Leaf sales have risen by double and triple digits in the past few months, according to Brian Maragno, Nissan's director of electric vehicle marketing and sales.

    Jeff Rosen, longtime owner of Rosen Nissan in Milwaukee, admits he has never sold many Leafs. But last year, he opened a store 80 miles away in Madison, Wis., where he suddenly finds himself in the Leaf business.

    "It's amazing the traffic we get from the Leaf there," Rosen said. "Madison is a very green-conscious market. It differs from area to area in the country."

    Others coming

    That flickering of a flame -- plus the heavy demands facing automakers for higher fuel economy -- is bringing more new EVs into the market.

    Volkswagen is preparing to launch as many as 30 EVs and targets 1 million sales by 2025. General Motors is launching the Chevrolet Bolt, a car that can travel more than 230 miles on a single charge. Daimler said last week that it will convert its Smart brand into an EV brand. And Tesla said this month it is preparing for trial production of its eagerly awaited Model 3, the product it hopes will move the California EV maker into high-volume sales. Even the ever-sensible Toyota, which for the past few years has steered clear of EVs, has created a department to expedite EV development.

    Nissan's Brian Maragno says in some areas, Leaf sales rose quickly in recent months.

    All of this may sound out of step with U.S. consumer demand, which lately has been focused on trucks. Last year, Americans bought just 84,246 EVs of all brands -- a drop in the bucket in the market's record 17.5 million-unit year. Nissan in particular is far behind in its vision to mass market EVs. In 2010, it invested $1.8 billion to build plant capacity in Smyrna, Tenn., that would yield up to 150,000 Leafs a year. 

    But something is starting to stir in EVs, even as more consumers queue up for full-size trucks and the new conservative White House administration signals that it has little love for demanding fuel-economy regulations: EV sales are increasing. 

    EV sales rose nearly 19 percent in 2016, on top of a 5 percent increase the year before. 

    Jeff Schuster, senior vice president of forecasting at LMC Automotive, has been somewhat of a skeptic on EV demand since the first cars reached the market. But he acknowledges the stirring. 

    "Several European and Asian brands will be launching EV versions of their SUV/CUVs over the next three years, which will line up better with consumer tastes and segment trends," Schuster told Automotive News. "As advancements in range continue, costs come down and charging is more convenient, interest in EVs will rise." 

    But there is something more to succeeding in EVs than the technology, says Jan Thompson, North American Automotive Lead with the global industry consulting firm Ipsos. "It's the dealers who are figuring out how to sell EVs," says Thompson, who a decade ago -- before the arrival of the Leaf -- was Nissan North America's vice president of marketing. 

    "It's a different sell. You don't sit back and wait for customers to come in and buy. You've got to go out and earn it. And some are doing that. 

    "And frankly," she adds, "if one dealer can do it, there's no reason why 18,000 dealers can't do it."

    The dealer factor

    That's also the way Christiano sees it.

    "We do a lot in the community," he says of his Leaf success, "very close to home but also around the state.

    "Where it really started for us was having a dedicated EV specialist on the team. He does EV outreach and education. He visits local schools and talks to students about the vehicle and how the technology works. He joined various groups and government advisory boards."

    The Boulder dealership conducts ride-and-drives in which it takes half a dozen Leafs to a local company parking lot and lets employees drive them.

    "It seems like every time we do a public event, the customers just follow us back to the dealership," Christiano says.

    The store has also participated in group-buy efforts, in which a local utility or government agency includes Leaf material in its own communications with consumers.

    In December, a group-buy effort in the Kansas City market appeared to wake up local consumers. The dealers of the area had been selling just four or five Leafs a month, combined, according to Maragno. In December, they sold 88.

    "It comes down to the dealer and the market. If the public wants it, and if the dealer does his job, the car will sell," Christiano says.

    He declines to speculate on what might happen in the year ahead, as the new administration in Washington reconsiders some of the moves that fostered the EV segment in the first place -- such as the looming federal 54.5 mpg fuel-economy target, and the $7,500 federal tax credit for EV purchases.

    "It's really not a big worry," Christiano maintains. "It depends on what your beliefs are as a consumer, and what your community values are. When we go out and talk about the benefits of this car, customers don't shut us down. They want to hear it."

    More pressing for Nissan this year may well be the competitive scene. The battery-powered Leaf competed neck-and-neck against the plug-in hybrid Chevrolet Volt after the two cars launched in late 2010. But this year, Chevrolet has introduced the battery-powered Bolt, which boasts twice the battery range of the Leaf.

    Christiano doubts he will be bothered by the Bolt.

    "As it happens," he says, "the Chevrolet dealership here in Boulder closed down during the GM restructuring in 2009. So we will continue focusing on what we're doing." c

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