TURIN/TOKYO – Mitsubishi Motors Corp. has agreed to make 100,000 electric vehicles for PSA/Peugeot-Citroen SA starting this year as the Japanese automaker seeks to boost volume and cut costs.
The French automaker originally agreed to buy 25,000 electric cars from Mitsubishi but doubled the order late last year and doubled it again this month.
The supply contract for the battery-powered Citroen C-Zero and Peugeot iOn runs from this year until 2015.
Carmakers around the world are competing fiercely to bring electric vehicles to the market as regulation caps carbon dioxide emissions from gasoline and diesel engines and customers look to buy more "green" products.
Under the agreement, announced March 8, Mitsubishi will start producing the zero-emissions vehicles for PSA in October, and the products will be sold in Europe by year's end.
PSA's brand boss, Jean-Marc Gales, told Automotive News Europe last week at the Geneva auto show that PSA will be the first mass-market European automaker to sell electric cars in Europe.
Small Norwegian electric car maker Think's City minicar has been on sale in Europe since December 2008.
The PSA models are based on Mitsubishi's i-MiEV electric car, which is already on sale to fleets in Japan and goes on sale to private buyers there next month. European sales of the four-seat i-MiEV start late this year and in the United States in mid-2011.
Japan's Nissan Motor Co. also has promised to start European sales of its Leaf electric car before the end of this year.
PSA aims to sell 25,000 a year, with half going to each of its Peugeot and Citroen brands.
That volume will take time to reach.
Mitsubishi only can produce 9,000 electric car batteries during its upcoming business year, April 1, 2010 to March 31, 2011.
“This is a headache for us,” Mitsubishi President Osamu Masuko told ANE in Geneva, “because out of 9,000 we have to decide how many will be for the domestic market, how many will be exported and so forth.”
He said the company expects to make a decision soon on how to divide up the 9,000 cars.
Mitsubishi plans to produce 18,000 electric cars in its 2011 business year. By the fiscal year ending March 31, 2013, Mitsubishi expects to make 30,000 i-MiEVs a year. Total electric vehicle output will reach nearly 55,000 after adding PSA's 25,000 units.
Picking the right price
PSA's Gales said the French automaker will aim its electric cars at private buyers in large cities.
“We are not ruling out fleet sales, but our main target is urban private buyers with a sense of style and the environment,” he said.
Gales said he expects the C-Zero and iOn to be priced slightly below 30,000 euros (about $40,770), a price that already deducts a 5,000 euro subsidy offered to electric-car buyers in France. Starting next year, the UK will offer an incentive of 5,000 pounds (about $7,490) to buyers of electric cars.
PSA also plans to offer a four-year, 500-euro-a-month lease with no down payment on its electric cars.
Mitsubishi's Masuko said the starting price for the i-MiEV in Germany, which has not launched an electric-car subsidy, will be about 48,000 euros including tax and destination charges. He said the i-MiEV will be aimed at fleet customers.
Nissan CEO Carlos Ghosn has said the Leaf will cost as much as a high-spec version of a diesel-powered compact car, which in Europe is about 35,000 euros to 40,000 euros depending on the brand.