Nissan recently announced a new £13 billion investment to help it transition to being focused around electric vehicles. The Nissan plant in the north east of England makes the popular Nissan Leaf, and the company plans to build 23 new electric models by the year 2030.
Nissan has a long way to go if it wants to catch up toTesla. The Model 3 and Model Y are the most popular EV in the world, shifting around 230,000 vehicles per quarter between them. The best selling EV in China is the Wuling Hingguang Mini, which is manufactured by SAIC. Volkswagen, BYD andHyundai followed.
Nissan can buck the trend if it builds businesses on internal combustion engines, but why are many of the traditional players building their businesses on internal combustion engines?
Some have struggled.
The first serial production EV with batteries was created byTesla in 2008. It has gone on to evolve a suite of vehicles whose range, performance and efficiency are arguably the best in the business.
It makes sense that if you have been making EV for a long time, you are more successful now. You will have more data on how drivers use your vehicles, what goes wrong with them, and how to best manage suppliers of motor and batteries.
Nissan sold half a million units of the Leaf over the course of a decade, making it one of the best selling electric vehicles of all time. Being successful at making vehicles with internal combustion engines does not guarantee success at making electric vehicles.
General GM is an example. The EV1 was the first of its kind and GM was there all the way back in the late 1990s. These little cars were loved by their owners. Conspiracy theorists have questioned whether GM was serious about taking the EV1s to mass market. EV1s became the star of the documentary.
In 2010, GM tried again to crack the EV market, but was killed in the process. The Bolt was designed to be a cheap, long range EV. It has had battery issues. Car parks in the US have banned Bolt packs from entering because of the knowledge that they can catch fire.
GM has a solution and has recalled tens of thousands of Bolts to have their battery packs replaced. The production of new Boltsis is currently suspended. GM recently came in for criticism after showing no EV at the LA Auto Show. President Biden recently credited GM with leading the industry in EV manufacture.
Toyota was a key player in moving the industry to green vehicles in the late 1990s, but is now playing catch up. The bZ, the first volume production EV, was released in December of 2021. In the first half of 2021, Toyota's hydrogen-powered Mirai sold just 316in Europe, which is less than EV with batteries have sold. The BYD and Toyota are planning to launch an electric vehicle priced at US$30,000 in 2022.
Volkswagen is seen as the most likely to catch up with the production of EV by the year 2024. The German giant is spending over $30 billion on the sector. Volkswagen acknowledges that it takes them three times as long to make its flagship EV as it does to make a car from start to finish. The goal is to narrow the gap to double.
Nissan has an advantage.
If we have learned anything from the Chinese EV entrants, it is that electric cars can be made better with custom electric cars. The Polestar 2 was originally meant to be a petrolVolvo S40, but it was changed to be an electric vehicle. You end up with cars with less range on the battery and less space inside.
Nissan and its alliance partner are able to have a custom EV platform. It allows the group to share components across different EV's and make them more efficient.
The second vital factor to producing EV at scale is to make your battery packs close to the final assembly factory, which reduces transport cost and time. Again, Nissan is close to this box. The plant in which the Leaf will be produced is close to the Energizer battery factory. Nissan would be able to make 500,000 new cars a year with 38GWh of batteries from the Chinese company, which would put it on par with the US and China.
Nissan has years of EV knowledge, efficient battery supply chains, and a bespoke EV platform that could make it the legacy automaker that will be able to compete with the new kids on the block. If it fails to take advantage of its advantages to become an EV-first company, we have seen other companies fail.
The Conversation under a Creative Commons license has an article by TomStacey, Senior Lecturer in Operations and Supply Chain Management. Read the article.
