UPDATE 1-Nissan prices Leaf EV at premium to Prius in Japan

* Nissan’s electric Leaf priced at sharp premium to Prius

* Subsidies seen reducing consumer cost to near 2.99 mln yen

* U.S. pricing to be announced later on Tuesday
(Adds detail from announcement, background)

YOKOHAMA, Japan, March 30 (BestGrowthStock) – Nissan Motor Co
(7201.T: ) on Tuesday said it would sell its battery-powered Leaf
hatchback starting at 3.76 million yen ($40,640) in Japan,
counting on government subsidies to slash the cost to consumers
for its mass-market bet on the electric car.

Nissan said it aims to sell 6,000 Leaf cars, its first
mass-volume all-electric model, in Japan for the year ending in
March 2011. The company will start taking orders for the model in
April 1 in Japan, with the first delivery expected in December.

After accounting for Japanese government subsidies, Nissan
said the net cost to consumers to buy a new Leaf would be near
2.99 million yen ($32,373).

By contrast, Toyota Motor Corp’s (7203.T: ) gasoline-electric
Prius hybrid, now in its third generation, has a base model
starting price at just over 2 million yen ($22,195) in Japan.

The Leaf pricing also represents a premium over established,
combustion-engine powered small sedans like the Honda Civic and
Toyota Corolla that analysts have said represents the cost of
developing and producing the Leaf’s lithium-ion battery pack.

The cost of batteries and the reluctance of consumers to pay
more upfront for fuel-saving technology are seen as the major
hurdles to mass-market adoption of electric vehicles.

Nissan, which has pledged to make the Leaf cost-competitive
with gasoline-powered vehicles of comparable size, was set to
announce U.S. pricing for the Leaf later on Tuesday.

Analysts had expected Nissan to set the U.S. price of the
Leaf somewhere between $25,000 and $30,000.

A $7,500 tax credit is available for U.S. consumers who buy
electric vehicles like the Leaf and the upcoming Chevy Volt
plug-in hybrid from General Motors Co (GM.UL: ).

After trailing rivals Toyota Motor and Honda Motor (7267.T: )
in the hybrid field, Japan’s No.3 automaker has bet heavily on
pure electric vehicles along with partner Renault SA of France.

Nissan has said it expects that 10 percent of the world’s
auto market will be electric vehicles by 2020, a ratio at the top
of industry projections.

The automaker has also announced a series of partnerships
with utilities and government agencies in the United States and
Europe where it believes it has a chance of seizing market
leadership.

The five-passenger Leaf is designed to provide a range of 160
km (100 miles). Nissan has developed the battery pack for the
Leaf with NEC Corp (6701.T: ) so that it can be recharged overnight
on a 220-volt connection.

While skeptics abound, almost all major automakers are
working on developing battery-run cars for use mainly in urban
areas, to meet stricter emissions and mileage regulations being
introduced around the world.

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(Reporting by Nobuhiro Kubo; Editing by Chris Gallagher)

UPDATE 1-Nissan prices Leaf EV at premium to Prius in Japan