If imitation is, indeed, the sincerest form of flattery, than Tesla Motors (NASDAQ:TSLA) should be blushing a deep red. Nissan Motors (NASDAQOTH:NSANY) announced at the just-ended New York International Auto Show that it plans to offer two years of free public charging for its battery-electric vehicle, the Leaf hatchback, in the car's 10 strongest U.S. markets. Tesla, as many of you might know, offers free lifetime charging for its high-end Model S at its ultra-fast-charging Supercharger stations.
First, let's cover the specifics of Nissan's promotion, and then we'll get to what could be the bigger auto industry picture.
Nissan's EZ-Charge program
Nissan's offering this program, which begins on July 1, as a way to entice more consumers to buy or lease a Leaf, of course. Such a program is surely meant to provide not only a financial incentive, but also help alleviate so-called "range anxiety" among drivers of purely electric vehicles. This is a particular concern with vehicles, such as the Leaf, which have considerably less range than does Tesla's Model S. The EPA rated range per charge for the Leaf is 75 miles; the Model S with the 85 kW-h battery has a 265-mile range.
The Leaf is selling well for an EV, as U.S. sales more than doubled last year to 22,610 vehicles, and were up 46% in the first quarter of this year to 5,184. Further, the Leaf is the world's best selling highway-capable all-electric car in history, with total global sales of about 110,000. These numbers, however, pale to sales figures for comparable gasoline-powered vehicles.
Beginning July 1, consumers will receive an EZ-Charge card when they buy or lease a Leaf in these 10 markets: San Francisco; Sacramento; San Diego; Seattle; Portland, Oregon; Nashville; Phoenix; Dallas-Fort Worth; Houston; and Washington, D.C. Nissan plans to add another 15 U.S. markets to this promotion in 2015; I'd imagine several major Northeastern cities will make round No. 2.
NRG Energy will manage Nissan's EZ-Charge card program. Leaf buyers and lessees will have use of NRG's eVgo charge network, which includes AeroVironment, Car Charging's Blink, and ChargePoint public chargers.
What Nissan's move could mean to the auto industry
It seems to me there are two possible implications from Nissan's new promotion: increased traction for EVs as the alternative fuel vehicle of choice, and the establishment of free public charging as a standard for EVs.
Nissan's move not only should help boost sales of its Leaf, but should also give a boost to EVs as the alternative fuel vehicle of choice among the motoring public. The more consumers buy EVs, the more charging infrastructure gets built out, and so on. While several major automakers are on the cusp of hydrogen fuel cell vehicle pushes, the fueling infrastructure for these vehicles is considerably behind that for EVs. Not only does it need to catch up, it needs to surpass, because fueling a hydrogen fuel cell vehicle at one's home isn't an option.
With Nissan hopping aboard Tesla's business model as it relates to free public charging, it's likely that other EV makers will do the same in order to stay competitive. If this happens, more consumers should be drawn to EVs, as moderately priced vehicles that come with free "fuel" for a considerable period of time seem like good value propositions. The base price for the 2014 Leaf S, the standard model, is $28,980, or $21,480 after the $7,500 federal tax credit.
The Foolish takeaway
Nissan's free charging promotion should not only help drive sales of its Leaf, but also put the pedal to the metal for EV sales in general, as other EV makers are likely to follow suit and offer similar promotions.