The difference between the acquisition process of the Nissan LEAF and the Chevrolet Volt

The big question seems to be this: how much will I actually pay for my (insert your vehicle of choice here)? And we think that this is a very good question. Let’s take a look at the difference in the ordering process of these two vehicles which will provide the basis for answering this question.

Let’s start with the Volt. GM has announced that initial production will be limited to 10,000 vehicles for 2011. Predicted 2012 production has recently been increased from an initial goal of 30,000 units to 45,000 Volts. Nissan has already stated Oppama, Japan LEAF production will be 50,000 in 2011 (with half of those coming to the US), with Smryna, Tennessee adding capacity of 150,000 units annually in late 2012 to provide for the US market. So the LEAF will be much more widely available, both initially, and into 2012.

If you want a Volt, you go to your local participating Chevrolet Volt dealer (in select markets). You place your order with that dealer. This is where the process differs significantly from the Nissan acquisition process. If you are interested in the LEAF, you go to the Nissan website and place a refundable reservation on a LEAF. This reservation “buys” you a place in line. It is not a deposit on a LEAF. Once the order process opens up in late August, orders will be taken (in select markets) in the order that the reservations were received. Should you change your mind when Nissan lets you know that you are now eligible to order the LEAF, they will refund your $99 reservation fee and notify the next person in line.

The key difference here is this: Chevrolet is selling the Volt to the dealer, which in turn sells the Volt to you. According to this article in the New York Times, there have already been stories of dealers charging significantly above (perhaps as much as $10,000 above) MSRP to acquire your Volt. Nissan is selling the LEAF to you (via their website), and you select a dealer to deliver it to you. Why does this matter? Good question.

With the LEAF, when it is time to place your order, the process will work something like this when you call your local participating Nissan LEAF dealership: “I would like to order a LEAF, will you sell it to me for MSRP?” If the answer is no: “Thank you. I will now call your competitor to see if they will sell it to me for MSRP.” Remember, the LEAF will be initially available in five select markets. All of these markets have many Nissan dealerships for consumers to choose from. Very shortly, the dealerships will realize that a sale at MSRP is better than no sale at MSRP plus “Dealer Added Markup” of whatever amount. Once you have made your calls, and found a dealership that will sell the LEAF to you at MSRP, you can go into your LEAF online account and select that dealer as your preferred Nissan dealer. Do not expect to see the LEAF available at anything under MSRP initially. Also, it will likely not be an available vehicle through any discounted vehicle programs (such as the Costco program).

Nissan seems to have enough reservationists that many of these will turn to orders to absorb early production capacity. No one knows how many will ask for their reservation fee back when it comes time to step up to the plate. Once all of these early orders have been filled (Nissan currently has over 17,000 reservations for the LEAF), only then will dealers start receiving inventory to stock and make available in the traditional sense. At that point in time (whenever it might be) they will have the car on the lot, and you will go in, look at it, drive it, and buy it. We expect that by then, demand will still be brisk as LEAFs are seen on the street and in your neighbor’s driveway. But the MSRP precedent will have been established, so we feel that it would be unlikely that dealerships would then start adding the dreaded “Market Value Addendum” sticker. Time will tell.