- Local dailies today reported that Tan Chong Motors (TCM) will be launching the Nissan Leaf in 3Q13. Nissan Leaf is the first commercial EV sold in the world (as at mid-2012, 24K units have been sold worldwide). Pricing is expected to be below RM200K, and likely to be well above RM100K.

- The Nissan Leaf uses Lithium-Ion batteries, can reach a maximum speed of just over 140km/hour and generate a power output of 110 horse power. However, it generates torque of 280NM almost immediately – such torque would be similar to that of a high performance VW Golf GTI.

- The principles of an electric engine are similar to that of a radio-controlled car, i.e. power comes in at the maximum the instant the car moves. However, this power is managed by a “diffuser”, which reduces the power that is channeled towards the wheels and gradually concentrating it as required (essentially acts as a gearbox for EVs).

- The running cost is estimated at 5 sen/km, about 25% cheaper than a hybrid and 50% cheaper than a small C-segment internal combustion engine car. The model, however, is not expected to be a volume seller as it is a niche, lifestyle model. TCM has installed 4 charging stations, It takes circa 6-8 hours to charge the batteries to full power using a normal charging point (costs RM700/point), but just 30 minutes via quick-charge stations.

- We were made to understand that one of the key stumbling blocks for mass usage of EVs in Malaysia is the lack of supporting infrastructure. While a typical fully-charged battery should be sufficient for a normal daily drive to and from work, long distance driving could be a challenge.

- Another issue is the cost of a battery which typically accounts for up to 70% of an EV’s total vehicle cost, but which entails a lifespan of only 10-15 years. This will have a drastic impact on depreciation of EVs, in our opinion. Nonetheless, we note that EVs are at a very early stage of introduction into worldwide markets. As scale grows and more efficient batteries are produced, such issues are hoped to be tackled.

- Maintain BUY on TCM (FV: RM6.40/share). The Leaf aside, we expect several new model launches beyond the Almera to possibly sustain Nissan’s strong sales momentum later in the year. Annualised 1Q13 Nissan TIV of 58,852 is already slightly ahead of our FY13F Nissan TIV of 54,323 (+50% YoY).

Source: AmeSecurities