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Nissan to spend $ 17.6 billion over 5 years on electrification

The Nissan Motor logo is displayed during a press preview of the company’s new Ariya all-battery SUV at the Nissan Pavilion in Yokohama, south of Tokyo, Japan on July 14, 2020. REUTERS / Issei Kato

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TOKYO, Nov. 29 (Reuters) – Nissan Motor Co (7201.T) has announced that it will spend 2,000 billion yen ($ 17.59 billion) over the next five years to accelerate the electrification of vehicles, in the goal of catching up with competitors in one of the fastest growing areas for the automotive industry.

This marks the first time that Japan’s No.3 automaker, one of the world’s leading manufacturers of consumer electric vehicles (EVs) with its Leaf model more than a decade ago, has unveiled a plan to complete electrification.

Nissan will spend twice as much as in the previous 10 years for a share of the electric vehicle market like its competitors, including Toyota Motor Corp (7203.T) and new entrants such as Tesla Inc (TSLA.O), go moving forward with their electric car projects.

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Nissan said Monday it would introduce 23 electrified vehicles by 2030, including 15 electric vehicles (EVs), and wanted to cut lithium-ion battery costs by 65% ​​within eight years. It also plans to introduce all potentially revolutionary solid-state batteries by March 2029.

These commitments, said managing director Makoto Uchida, would make electric vehicles affordable for more drivers.

“We will advance our efforts to democratize electrification,” he said in an online presentation.

Some analysts were unimpressed with Nissan’s plan, noting that it was already behind rivals in the electrification game.

Masayuki Otani, senior analyst at Securities Japan Ltd, also said auto shares were down on Monday due to market concerns over a new variant of the coronavirus and the impact it could have.

have on production plans.

“Nissan’s long-term vision comes at a time when the market may not be receptive to it. You could say that this represents a huge increase in investment, it feels cautious,” he said. declared.

Nissan shares fell 5.1% on Monday, underperforming major rivals. They were down 3.8% in afternoon trading.

Nissan shares after strategy

Although still only a small portion of vehicles on the road, global electric car registrations in 2020 increased by 41% even as the global auto market contracted by nearly a sixth, according to the International Agency. of energy (AIE).

At the United Nations climate summit in Glasgow this month, major automakers, including General Motors (GM.N) and Ford Motor Co (FN), signed a statement urging them to phase out fuel-powered vehicles fossils by 2040.

Nissan, however, has not made a commitment to abandon gasoline vehicles. It said on Monday that half of its vehicle fleet would be electrified by 2030, including electric vehicles and its e-Power hybrids.

As it prepares to compete for growing demand for electric vehicles, Nissan in July pledged $ 1.4 billion with its Chinese partner Envision AESC to build a giant battery plant in Britain that will power 100,000 vehicles by year, including a new crossover model. Read more

Rivals including Toyota, which also refused to sign the Glasgow pledge, are also increasing their battery production.

The world’s largest automaker by production volume plans to have 15 battery-electric vehicle (BEV) models worldwide by 2025 and will spend $ 13.5 billion by 2030 to develop cheaper EV batteries and more powerful and their supply system.

Toyota has announced plans to introduce solid-state batteries by the mid-2020s.

These power supplies are attractive to automakers because they are more energy dense and less likely to catch fire than liquid lithium ion power supplies. They are, however, prone to cracking and are currently more expensive to produce.

Nissan said its goal is to reduce the cost of solid-state batteries to $ 75 per kilowatt-hour (kWh) by 2028 and lower it to $ 65 per kWh in the future to make them competitive with gasoline vehicles. .

($ 1 = 113,7000 yen)

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Reporting by Tim Kelly; Additional reporting by Maki Shiraki; Editing by Muralikumar Anantharaman

Our Standards: Thomson Reuters Trust Principles.