Nissan's Nifty Ordering System for the Leaf. How Did it Work Out?

In my last post, I explained the advantages of Nissan's innovative online reservation and ordering system.  I explained that it is designed to put the power in the hands of the customers, to be as fair as possible, and to reduce uncertainty and stress.   How did it work in reality?

Well, like anything else new and complicated, the result was both good and bad.

I'll start out by summarizing the good and the bad, and then I'll talk about my own experience.

The Good:
As I mentioned before, Nissan's online system definitely put much of the control in the hands of the buyers and took away the ability of the dealers to pad prices.  This is because the system is basically a factory ordering system, and the choice of delivery dealership is totally in the customers' hands.  If you don't like the price quoted by one dealer, then you can take your reservation to another dealer.  Because of that and because of online discussion forums, word got out when dealers were willing to discount the car.  Small dealerships in some areas were willing to offer discounts to get more sales.  Other dealers followed so that they wouldn't lose the business.  Some Arizona and California customers ordered from dealers as far away as Washington State to get a good price!  The dealers covered part or all of the cost of shipping the car to the customers.  The fact that Nissan put the power in the hands of the customers is a huge and revolutionary idea, and this is the reason why I think that the online system is a big success.

The Not-so-Good:
In other ways, the system brought its own types of uncertainty and stress.  Nissan never made clear what factors determine a buyer's priority in line to buy the car.  During the reservation process, their help staff said that a delay in reserving because of a web glitch wouldn't cause a delay in ordering or delivery of the car.  Later, they said that the reservation timing is the sole determinant of order priority within a region.  Lots of people had issues with their online accounts due to issues with Nissan's web site.  When it came time to place orders for the cars, it was never clear why some people were able to order on August 31 and why some had to wait until September.  For those who were to order in September, Nissan gave no clue as to which day in September.  So buyers were obsessively checking their status on the Nissan site every few minutes for days, waiting to be able to order, and not sure if a delay on their part in placing the order would delay their place in line to get the car.  Some people are still waiting, as of September 18.  Timing is important to buyers because they may need to take delivery of the car during 2010 for tax purposes, and in certain states such as California, rebate money is first come, first served until the money is exhausted.  The delivery dates of the ordered cars are still not known, though Nissan has promised to post them on the web site when manufacturing begins in October.

Though Nissan set up online help chat and a phone help line, the people answering those lines often were told very little, or they gave conflicting information.  So uncertainty and stress are still part of the process for some of the buyers, despite Nissan's efforts to make the experience simple and straightforward for the buyers.

My Own Experience:
My own experience was stressful from the start.  Like all of those who reserved early, I waited all day on April 20 to get my email telling me that I could go ahead and put down my $99 deposit and reserve my Leaf. My email didn't arrive until about 30 minutes before the announced end of the open period, just before 6 pm Eastern Time.  Issues with Nissan's web site not being able to accept my AMEX card, though they listed AMEX as an option, plus typographical errors on my part caused my account to lock.  After calling Nissan's help line and waiting my turn to talk to a human, I was told that they would look into it and call me back in 5 to 7 days!  I was beyond frustrated, since it seemed that I would lose the chance for an early place "in line" due to Nissan's issues with its web site. Eventually, days later, I was able to reserve my spot, with further issues, involving a duplicate account, two credit cards being charged, etc.

When ordering opportunities were announced, I was somewhat surprised and pleased to see that  I would be able to order in September, and I was able to order on September 3.  But I still experienced anxiety while waiting for my order window to open, and it just as easily could have been September 12 or later, and I would have been left hanging for days, not knowing if I had fallen further behind in line.

So though Nissan did successfully put some of the power into the hands of its customers, they also created their own kinds of stress and uncertainty in the way they implemented their new system.

In my next blog post:  I Need a Charging Dock?  What's That?

So I Like the Leaf. How do I Get One?

How does one usually go about buying or leasing a hot new car that is in limited supply?  Usually, you go to one or more car dealerships and get your name on their "list".  Sometimes they ask for a deposit.  Discounts are never possible.  In fact, you're usually lucky if they'll allow you to buy the car at MSRP. Instead, dealers usually mark up the price by several thousand dollars.  When the car arrives, they may or may not call you according to their list if they can get a better price from someone who walks in the door with more money.  When you finally get the car, you are usually angry, stressed and you'll probably regret paying higher than MSRP after a year, when the car is being widely discounted.

In fact, that is the way it works in almost every case.  And that is what some prospective buyers of the Chevy Volt are experiencing today.

Nissan decided on an innovative online system to help to make the buyers' experience more predictable and less stressful.  Prospective buyers registered on Nissan's Leaf web site before the middle of April, 2010.  On April 20, people on the interest list were sent emails telling them that they could register their interest in buying the car.  They each put down a $99 deposit to hold their reservation.  The process can be tracked on the web site. Then, beginning on August 31, reservees were notified that they could place their orders.  The orders were placed through Nissan dealers who were pre-selected by the customers.

This system made the buying process transparent, and the power was in the hands of the customers.  They could negotiate the selling price in advance, and the dealers knew that the buyer could take his reservation to another dealer if he/she didn't like the price.  The result was that dealers began to DEAL.  Through online forums such as http://www.mynissanleaf.com/ , prospective buyers could find out which dealers were discounting the Leaf.  This led to more discounting by other dealers.  Discounts of $1,000 became common and a few dealers offered discounts of 5% off the $34,000 MSRP, equal to a $1,700 discount, or more if the optional equipment was discounted.

So as of this writing, the same system is in place.  You can buy a Leaf by registering on the Leaf web site:  http://www.nissanusa.com/leaf-electric-car . Since the car is in limited supply and the production and sales are being carefully managed by Nissan, you may not be able to place your order for a Leaf until early 2011, with delivery of the car by summer or fall.

Alternatively, if you really want or need the car sooner and you haven't registered with Nissan yet, you could try talking to dealers to see if they have a list of prospective buyers who are interested in buying a car if a registered buyer cancels their order.  It is possible that these cars may become "orphans" and that dealers will be able to sell them as they become available.  I don't know this for sure, and it is also possible that these "orphan" Leafs will be offered to the next registered buyers in line.  If dealers do have orphan cars for sale, be prepared for them to charge additional fees.

My next blog topic: My experience with Nissan's ordering system.

And....I Chose... the Nissan Leaf!!

My Next Car: The Nissan Leaf SL Electric Car

So after thinking hard and comparing the Chevy Volt and the Nissan Leaf, I chose the Leaf!

Why?

First let's look again at my reasons for wanting an EV.

1) I want to reduce my oil consumption and my carbon footprint.
2) I want a fun, interesting car to drive.
3) I'd like to make good use of the extra electric power that our solar PV system makes.
4) I'd like to support the adoption of EVs in our country to help us to use less foreign and domestic oil.
5) I think it would be fun to be an early adopter and I'd like to be in a position to explain EVs to other potential EV owners and to help automakers and governments to understand how people will use EVs.
6) I'd like to experience what it is like to drive an EV in daily life, including using public charging opportunities when needed to boost my range.
7) I'd like to reduce our family driving costs.

I thought that the Volt would be a less aggressive move to reduce oil usage and reduce our CO2 production because of its gas engine.  The all-electric Leaf felt like a more positive choice in that regard.

The purchase price was a factor as well.  Though I plan to lease the Leaf, and the Volt can be leased for a similar cost, I'm skeptical of being able to get that low lease price from the Chevy dealers.  Both cars are in very limited supply, but the Chevy dealers are known to be trying to gouge extra profits on the Volt.  I had much more confidence in Nissan's internet sales plan that keeps the dealers from trying to get extra profits.

I also liked the flexibility of being able to seat five people in the Leaf, as compared to four in the Volt.

The Leaf meets all of my needs in a car to replace my current BMW.  I don't have a daily commute, and I drive only about 6,000 miles per year.  We'll drive the Leaf more miles than that, replacing some of the miles that we currently drive the Prius.  But the 100 mile range of the Leaf should be more than enough for the neighborhood driving that we do, and the Prius is already, and will remain our car for distance driving.

Annual costs:
The question of the cost of driving is still an open one.  Charging the Leaf late at night during so-called "Off-Peak" hours will cost between two and three cents per mile.  Driving our Prius hybrid costs about twice that amount.  There will be no energy costs for up to 5,000  miles per year because of the extra power our solar PV system makes.  I calculate that overall, we'll save close to $1,200 per year in fuel costs.  There may also be some savings in car repair costs.

However, we'll be spending about $2,700 in electrical upgrades to our home to accommodate the 240 volt charging system for the Leaf.  So divided by three years, those upgrades will reduce our savings to only $300 per year.  Of course, the electrical upgrades will last for much longer than three years, so they can be used for other electric cars we might own as well.

So it doesn't make sense to drive electric to save money.  The attraction needs to be one of reducing pollution, using no petroleum, and having your own electric way to fuel your family car.  It is attractive to think that when the next oil company-manufactured gas shortage happens, I can smile and ignore it.

Fun and sporty to drive:
This was the one area that caused me a lot of thought.  The Volt seemed to be a sportier car than the Leaf, and a choice of a gas-powered sporty but efficient car like the Mini or a Miata might also be more fun to drive.  But as I've focused on the Leaf, I've become really enthusiastic about this new way of driving.  I think that the novelty of an EV, combined with the strong torque of the electric motor will be plenty satisfying to me.    But I'm leasing the Leaf, so if I find it boring, I will look for something more interesting after the three year lease is up.

In My Next Blog Post:  How Do I Get One of These Cars?

Volt - Leaf, How do I Choose?

So, lucky me, two major car companies are releasing new EVs exactly when I need a new car to replace my current car when its lease expires.  How do I choose?  That's really a good question because they both have positive and negative attributes.  As is often the case, it becomes an individual decision based on a person's driving needs.

Chevy Volt
Pros:
1) The biggest factor: Extended Range. The Volt answers the range anxiety question decisively with its on-board gasoline powered engine/generator.  When the main electric drive battery is discharged to a set amount (after about 40 miles of driving), the Volt starts up its engine and makes more electric power to run the car.  The car is still driven by its electric motor, but the electricity comes from the generator powered by the engine.  So the Volt can be your one and only car, just like any hybrid or plug-in hybrid can.
2) Appearance: Of the two cars, the Volt looks more conventional and is more attractive to many people's eyes.
3) Plugging In:  The Volt plugs in to outlets already found in most peoples' garages to charge its main battery.
4) Acceleration:  Early reports have the Volt performance a bit better than the Leaf's.
5) Made in the USA:  While most cars today, including the Volt, have some parts made in other countries, the Volt is made by General Motors.  This is a big factor to many people, especially as we watch GM try to recover from bankruptcy and government support.
6) Technically complex and interesting design

Cons:
1) Gasoline:  The Volt uses gasoline to drive beyond 40 miles after being charged.  Many people want an EV for the express purpose of getting off gasoline, for many reasons.  To these people, the Volt is just a plug-in hybrid.  And the gas mileage is still a big secret.
2) Appearance:  To some people, the Volt looks too much like a Prius, and not enough like something really new.
3) Price:  Starting at $41,000 and going up significantly from there, the Volt's price is daunting.   The lease price of $350/month, clearly established to help the Volt compete with the Leaf, is more encouraging, but it isn't clear whether anyone will be able to get such a good deal in the real world.
4) Sales Plan: Chevy's sales plan is the same car dealer-based system we all know and hate, so price gouging has already been seen, to the tune of thousands of dollars.  Even without price gouging, a buyer must go from dealer to dealer seeking the best deal, and then hope that the dealer will deal honestly with them.
5) Government Incentives:  Though the Volt is eligible for the same $7,500 federal tax credit as the Leaf, it is NOT eligible for the California $5,000 rebate.  Combined with the higher price tag of the Volt, this is a big deal.
7) Passenger Capacity:  The Volt only seats four, while the Leaf seats five.  This is because the Volt's design uses up the rear center seat space for its T-shaped battery pack.
8) Technical Complexity: Compared to a battery EV ("BEV") like the Leaf, nothing like the Volt has ever been made before.  The complexity of marrying the gas-powered generator smoothly and reliably with the electric drive system is daunting.  Will the first generation of the Volt be reliable, or will the first buyers unexpectedly find that they are test engineers?
9) Probable Repair and Maintenance Costs:  Not only does the Volt have the high voltage electric drive system, it also has fuel, ignition, engine management and exhaust systems, as well as sound and vibration deadening issues.  It seems that the Volt must cost more to maintain and repair than a pure EV.

Nissan Leaf
Pros:
1) Relatively Simple Design:  EVs have been built and studied before.  Nissan's goal is to mass-produce the first affordable BEV (battery electric vehicle).  Since they don't have to develop an all-new complex drivetrain design like the Volt's, Nissan can concentrate on making their simpler BEV work well from the start.
2) Price:  The basic Leaf starts at $32,780 before incentives, over $8,000 less expensive than the Volt.
3) Government Incentives: The Leaf is eligible for both the Federal $7,500 tax credit and the California $5,000 rebate.
4) Passenger Capacity: The Leaf seats five compared to the Volt's four.
5) Appearance: While odd-looking to many, some people like the fact that the Leaf looks like something new and different, which it is.
6) A True EV:  Using no gasoline and boasting no tailpipe, the Leaf is what EV enthusiasts, environmentalists and average people looking to drive gas-free have been waiting for.
7) Sales Plan: Nissan has created an innovative online reservation and ordering process.  Because this process is run by Nissan centrally, the dealers are really limited to handling the paperwork and delivery process, and the customers hold the power because they can take their reservation number to another dealer to get a better deal.  This sales design has created competition among dealers so that I personally will get a $1,000 DISCOUNT and other customers will do even better.  This is compared to price gouging among Chevy Volt dealers.

Cons:
1) Range: This is the big one. Unless a person has another way to travel distances further than the Leaf's promised 100 mile range, the Leaf can't be your only car.  There are ways to overcome this problem, such as borrowing or renting a car, using public transportation, and others, but most of us don't want to give up our cars for distance driving.  And people with long daily or weekly commutes may also find that the Leaf's range is not adequate for them.  Public charging stations at workplaces and along highways can help with this, but charging takes at least 25 minutes to several hours, so this isn't as convenient as filling up at your local Mobil station.
2) Plugging In: Because the Leaf's battery is larger than the Volt's and is the Leaf's only source of energy, charging the Leaf takes longer or requires higher voltages than charging the Volt.  That means that if you plug in to a 110 volt outlet that is already in most people's garages, it will take about 18 hours to charge the Leaf.  So Nissan recommends that you have a 240 volt circuit run from your home's power panel to your garage to charge the Leaf.  And this also requires a charging station costing at least $750 in addition.  I've been quoted a price of over $2,600 for these electrical upgrades to my house.  There is a Federal tax credit to cover some of this, but I'm not eligible for it because of the Alternative Minimum Tax.
3) Appearance:  Most people, including me, find the looks of the Leaf strange, fish-like, and not very attractive.
4) Foreign-Made: Though Nissan is building a factory for the Leaf in Tennessee, the first generation of Leafs will come from Japan.  And even when the U.S. factory is in production, the profits will go back to Japan.

So which did I choose?   Tune in to my next blog entry.
My EV of choice and my reasons for choosing it in my next blog post