The Globe and Mail

Renault Nissan shocked the Frankfurt auto show, now under way in Germany, by rolling out a four-car lineup of all electric vehicles.

The Twizy ZE (Zero Emissions) is a two-seat city car about the size of a small motor scooter. The Zoe is a four-seater, the Fluence a five-seater and the Kangoo is a tiny electric van. Each will have a range of approximately 160 kilometres on a four- to eight-hour charge.

Renault Nissan has made a massive financial commitment in an effort to become the leading manufacturer and distributor of pure electric vehicles for the mass market. It is not an exaggeration to say that CEO Carlos Ghosn has bet the company on it.

Vaughan: This didn't happen overnight. How long have you been working on this?

Ghosn: In 1999, I arrived at Nissan and we needed to revive the company.

I reviewed all the research taking place in Nissan. There was one particular program that was about batteries. I met with the engineers in charge of this program and they told me about it and I could feel how much faith they had in this development. I said we are going to continue this. I did not stop it.

I don't think anyone believed at that moment in 1999 that the battery would become such a critical part of our industry. I am glad that 10 years after we are getting the benefits of all this research.

All this is possible because the lithium ion battery has made so much progress that we are ready to launch electric cars on the market.

The key is energy storage.

The key is energy storage. Exactly. This is the key.

That is why electric cars have a much better future than 10 or 15 years ago. The power density, the size, the cost of the batteries, the reliability of the batteries, the mileage of the batteries are much better than 15 years ago.

How big do you think your lead is over the rest of the industry?

I don't know. The competitors don't tell you exactly what they are doing.

But we know we have a lead. Maybe not in cars that companies bring to auto shows, but we have a lead in cars that we are going to bring to the market.

We have already announced capacity for batteries, capacity for car assembly.

None of our competitors have made these kinds of announcements and when you are putting $500-million down or $1-billion down, you make announcements.

So far we are the only ones engaged so heavily in mass-market, affordable electric cars.

But doesn't your whole strategy depend on government incentives and assistance to make electric cars affordable?

Well, you have to at the beginning.

There is no production today and you are competing with a product that today is produced in tens of millions of units.

You can not compete at the beginning.

We need government incentives at least to start the process. But I don't think that we are going to need them for a very long time.

After three or four years of introducing these cars, they are going to be able to sustain themselves.

Your strategy is pure electric while the Chevrolet Volt has a little gasoline engine on board for recharging.

Well, you have to make an assessment of where the market is going. You make an assessment of what the public agencies will be deciding.

The time for zero emissions is now.

We think oil prices will go up. If it is $70 a barrel in the middle of a recession, imagine what the price is going to be when we get out of the recession.

We think the environmental regulations are going to become more strict. We think the emerging markets are going to be asking for more and more cars.

I don't think we can deal with this without going to zero-emission cars. Minus-20, minus-30 per cent is not going to make it.

At the end of the day, you are going to have to have a product which is totally neutral to the environment and the only solution is electric cars or fuel cells.

Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 2 p.m. on CTV.