Nissan says hybrid will lose money

[guitarlix]

Nissan says hybrid will lose money

Japanese automaker will produce 'unprofitable' gas-electric Altima for 8 states with strict emissions rules.


WASHINGTON -- Nissan Motor Co.'s first gasoline-electric hybrid model goes into production next week, but the vehicle will not be profitable and the automaker is only bringing it to market to comply with California's strict emissions regulations, a top Nissan official said Thursday.
"Hybrids today are not a very viable economic proposition," said Dominique Thormann, Nissan North America's senior vice president for administration and finance. "It's still a loss-making proposition. ... It's unprofitable."
The hybrid version of the Altima sedan, Nissan's best-selling model worldwide, goes into production Monday in Tennessee and goes on sale next year.

The vehicles will be sold only in California and seven northeastern states that also have adopted California's tougher clean air rules: Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island and Vermont.
In 2003, the California Air Resources Board agreed to drop a stringent requirement that automakers build fully electric vehicles. In exchange, automakers agreed to make more environmentally friendly models -- including vehicles called Partial Zero Emissions Vehicles, or PZEVs. The number of low-emission vehicles required rises yearly based on a number of factors.

Nissan is looking at a number of technologies, including flexible fuels, diesels and other options, but is "not putting all of our eggs in one basket," Thormann said.

Full article continued at link:
http://www.detnews.com/apps/pbcs.dll...72/1148/AUTO01

[DanCBJMS1988]

That's a shocker. Send the "unprofitable" comment to Toyota ASAP!

[dmaxpwr]

does anyone know if GM's hybrids will be atleast breakeven?

[GotAWD]

Originally Posted by dmaxpwr

does anyone know if GM's hybrids will be atleast breakeven?

im no pro on hybrids but since the hybrid unit is going to be in the transmission i think its gonna be breaking even quicker than nissan would.

has toyota broken even on thier prius yet?

[griswold44]

Originally Posted by DanCBJMS1988

That's a shocker. Send the "unprofitable" comment to Toyota ASAP!

Pretty sure Toyota makes a profit on their hybrids.

[Al465]

Originally Posted by GotAWD

im no pro on hybrids but since the hybrid unit is going to be in the transmission i think its gonna be breaking even quicker than nissan would.

has toyota broken even on thier prius yet?

With GM's patents on the two mode hybrid transmission, they should be able to sell them cheaper than the competitors.

[uboys]

Originally Posted by dmaxpwr

does anyone know if GM's hybrids will be atleast breakeven?

Since they got Daimler-Chrysler and BMW to buy 1/3rd of it each @$300 million a pop(?), I would say they will break even a lot sooner than Toyota will (Billion$ over two generations).
I do say though, that hybrids are all just hype.
They do not sell like the hot cakes everybody makes them out to be.

A lot of people will end up in a rut and wonder how they allowed the loudmouth media to trick them into poor decision-making.

Even if they do it for PR, the "smart set" will die out before they praise any domestic company for anything.
They won't even buy one.

[mmm...bowtie]

Originally Posted by griswold44

Pretty sure Toyota makes a profit on their hybrids.

I remember hearing each Prius cost Toyota at least $100,000

[griswold44]

Originally Posted by mmm...bowtie

I remember hearing each Prius cost Toyota at least $100,000

I find it incredibly hard to believe that Toyota is constantly pushing hybrid development if they "aren't making any money".

[xioix]

Originally Posted by griswold44

Pretty sure Toyota makes a profit on their hybrids.

I think so, since Toyota has said they make profits on hybrids, small profits but nonetheless profits

Originally Posted by RoadandTrack

Amazingly, base price of the new Prius remains at $19,995. More amazingly, Toyota says it's making some profit on the car as well.

http://www.roadandtrack.com/article....article_id=828

[guitarlix]

Originally Posted by griswold44

I find it incredibly hard to believe that Toyota is constantly pushing hybrid development if they "aren't making any money".

It is very possible that Toyota is loosing money on its hybrids. However, they benefit from the halo image that the Prius provides and they're the forerunners in this area. Typically with volume, the cost of components comes down so if sales remain high, they'll eventually turn a profit.

[PhishPhood]

Originally Posted by DanCBJMS1988

That's a shocker. Send the "unprofitable" comment to Toyota ASAP!

That would be the icing on the cake. Nissan buys/licenses the hybrid technology from Toyota. It's not surprising that Nissan doesn't see a profit there.

Nissan to its credit has resisted the 'hybrid pull' waiting for diesels to be commonplace so that they can join their Renault/Nissan technology and sell diesels only. But the market is pulling them reluctantly, kicking and screaming if you will, to offer a hybrid.

"Oh, alright we'll do it but we're not going to spend any money developing it. Toyota, will you sell us a few so that we can put some on the road in the US and keep the customer's quiet?"

[asim]

Duhh that they are pretty much unprofitable. Thats not the point of hybrids. The point of hybrids is to save on emissions and to create a statement. I don't think Nissan is creating a good statement by only selling these cars in 8 states.

[69Firebird400]

It may be easier for Toyota than Nissan to turn a profit on hybrids because 1) they have a much larger hybrid production volume, thus the ability to take advantage of economies of scale, and 2) Toyota developed the technology in-house and therefore does not have to pay licensing fees. Nissan does.

I wonder if this is the same experience that Ford has had with the Escape/Mariner Hybrids, since they are paying some licensing fees to Toyota (though I seem to recall that Ford developed their technology in-house, yet chose to pay Toyota a licensing fee to avoid intellectual property problems...if Nissan didn't come up with anything on its own, maybe it's a larger licensing fee than Ford would have to pay).

But asim is right - hybrids are not really an economic proposition at this point either for their manufacturers or their buyers. They are environmental "halo" cars that convey a "green" image for their buyers and manufacturers, and use somewhat less fossil fuel and emit fewer greenhouse gases. But with the higher upfront purchase costs, and likely higher maintenance costs, you're not really saving money by owning a hybrid unless you keep it for a couple hundred thousand miles.

[goblue]

Originally Posted by guitarlix

It is very possible that Toyota is loosing money on its hybrids. However, they benefit from the halo image that the Prius provides and they're the forerunners in this area. Typically with volume, the cost of components comes down so if sales remain high, they'll eventually turn a profit.

Exactly. Toyota can say whatever they want, for all we know they are making a profit because they are not counting government subsidies, or something of that nature.

What is likely is that GM is making a profit on the BAS system, and will on the 2 mode. I expect demand for the 2 mode to be particularly strong as its going into vehicles that use a lot of gas. The Prius has been proven to be sort of silly, as there are European models of similar size that get very similar or even beat it, except in a strict city environment, so it sells on image. The 2 mode will sell on a cost / benefit calculation.

The 2 mode has phenomenal packaging, replaces an existing component rather than adding a whole new system, and development cost was shared. GM said a while back they could break even selling it as a $1500 option.

That system effectively drops the price of gas from $3 to $2.25 - a huge savings, and its geared to the driving that the majority of Americans do.

Here's some numbers. Lets say you drive a truck 15,000 miles a year, in a 50/50 split, so 13/19 averages to 16, at $3.00 gas thats $2812 on fuel. 25% of that is $703. If they sold it as a 2K option, you'd break even in less than 3 years and GM would make money. Even if they sold it at 3K you'd be saving money at 4 years, and probably sooner as who here thinks gas will be 3 bucks in 4 years.

Personally, the vehicle thats going to rock the automotive world is the Outlook hybrid. That is set to get a 40% mileage improvement. Thats over 30 miles to the gallon, average - on a car that could start at 30-32K, seat 8 with all their stuff, carry 4x8s home from the Lowes, and tow a 22 foot boat. Brilliant.