Nissan’s Leaf electric car – which will eventually be built in Europe at the company’s UK plant – will go on sale in Japan in December with a starting price of JPY3.76m (US$40,640).

The company said that this is considerably cheaper than EVs offered by rivals as it looks to take the lead in the market for zero emission vehicles. Nissan plans to sell 6,000 Leafs in Japan in the fiscal year ending March 2011. It will start taking orders for the car from Thursday, 1 April.

 Mitsubishi Motors ‘ i-MiEV carries a starting price tag of about JPY4.60m ($49,760).

Nissan said the actual price consumers would pay for a Leaf will be JPY2.99m ($32,344), based on the assumption that the car will be eligible for JPY770,000 ($8,329) in government subsidies for EVs.

Nissan chief operating officer Toshiyuki Shiga told a news conference: “We have aimed to sell EVs at reasonable prices from the early stage of development to help them become widespread.

“The most important point of our cars is zero emissions. Hybrid vehicles still consume gasoline. I want to fully push this sales point,” he added.

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By GlobalData

Nissan plans to reduce production costs by producing the car in Japan, the United States and Europe from around 2012.

The company claims that during six years of ownership, the electricity cost for the EV, if driven 1,000 kilometres (625 miles) per month, would total JYP86,000 ($930), significantly lower than the gasoline cost of JPY670,000 ($7,247) estimated to be needed by a car of a similar class.

The five-seater Leaf is powered by lithium ion batteries and has a cruising range of over 160km. Nissan is installing  200 volt chargers at all 2,200 dealers in Japan.

Analysts expect Nissan to set the US price of the Leaf somewhere between $25,000 and $30,000, according to Reuters. A $7,500 tax credit is available to US consumers who buy electric vehicles like the Leaf and the upcoming Chevy Volt plug-in hybrid from General Motors.

Nissan has said it expects 10% of the world’s auto market will be electric vehicles by 2020, a ratio at the top of industry projections. It has announced a series of partnerships with utilities and government agencies in the United States and Europe.