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Nissan unveils $18 billion electrification push in bid to draw level with rivals

Nissan Motor to spend $17.6 billion to accelerate electrification
Nissan Motor to spend $17.6 billion to accelerate electrification   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Tim Kelly</p> <p><span class="caps">YOKOHAMA</span> – Nissan Motor Co announced it will spend 2 trillion yen ($17.59 billion) over five years to accelerate vehicle electrification to catch up with competitors in one of the fastest growth areas for car makers.</p> <p>This is the first time Japan’s No.3 automaker, one of the world’s first mass-market electric vehicle (EV) makers with its Leaf model more than a decade ago, is unveiling a comprehensive electrification plan. </p> <p>Nissan will be spending twice as much as it did in the previous decade for a share of the EV market as rivals, including Toyota Motor Corp and newer entrants such as Tesla Inc, move ahead with their electric-car plans.</p> <p>Nissan said on Monday it will launch 23 electrified vehicles by 2030, including 15 electric vehicles (EVs), and wants to reduce lithium-ion battery costs by 65% within eight years. It also plans to introduce potentially game-changing all solid-state batteries by March 2029.</p> <p>Those commitments, Chief Executive Makoto Uchida said, would make EVs affordable to more drivers.</p> <p>“We will advance our effort to democratise electrification,” he said in an online presentation.</p> <p>Shares of Nissan slid 5.6% on Monday, underperforming its major rivals and compared to the benchmark Japan index’s 1.6% drop.</p> <p>Some analysts were unimpressed with Nissan’s plan, noting it was already behind its rivals in electrification.</p> <p>Masayuki Otani, senior analyst at Securities Japan Ltd, also said auto shares were falling on Monday because of concerns the new coronavirus variant would squeeze production.</p> <p>“Nissan’s long term vision comes at a time when the market is perhaps not receptive to it. It can be said that it represents a huge increase in investment, it feels cautious,” he said.</p> <p>Nissan’s electrification plan comes as it pulls back from a pursuit of sales volume pushed by former chairman Carlos Ghosn, slashing production capacity and model types by a fifth to improve profitability.</p> <p>“It’s very important for Nissan to show where we are going next, and today’s plan is a vision and direction which is talking about the future,” Chief Operating Officer (<span class="caps">COO</span>) Ashwani Gupta said when asked about the share price at the gallery at its headquarters in Yokohama where it is displaying only electrified vehicles.</p> <p/> <p>Graphic: Nissan shares https://fingfx.thomsonreuters.com/gfx/mkt/klpykdxeepg/image-1638174919146.png</p> <p/> <p>Although still only a small portion of vehicles on the road, global electric car registrations in 2020 grew 41% even as the overall car market contracted by almost a sixth, according to the International Energy Agency (<span class="caps">IEA</span>). </p> <p>At the U.N. climate summit in Glasgow this month, major car makers, including General Motors and Ford Motor Co, signed a declaration that committed them to phase out fossil fuel vehicles by 2040.</p> <p>Nissan, however, has not committed to abandoning gasoline vehicles. It said on Monday half of its vehicles mix will be electrified by 2030, including EVs and its e-Power hybrids. <span class="caps">COO</span> Gupta said the goal was a reference point that may change.</p> <p>As it readies to compete for the growing demand for EVs, Nissan in July pledged $1.4 billion with its Chinese partner Envision <span class="caps">AESC</span> to build a giant battery plant in Britain that will power 100,000 vehicles a year including a new crossover model.</p> <p>Rivals, including Toyota, which also declined to sign the Glasgow pledge, are also ramping up their battery production. </p> <p>The world’s biggest automaker by production volume plans to have 15 battery electric vehicle (<span class="caps">BEV</span>) models globally by 2025 and will spend $13.5 billion by 2030 to develop cheaper, more powerful EV batteries and their supply system. </p> <p>Toyota has said it is aiming to introduce solid-state batteries by the mid-2020s. </p> <p>($1 = 113.7000 yen)</p> <p/> </div>