Nissan: electric vehicles in certain niches, hybrids for the rest
Electrification has become the spearhead of several manufacturers. This is an orientation that was already looming, but by the admission of many, Tesla quickly democratized it and forced the industry to react. Many were caught off guard and had to accelerate their electric development plan by announcing at the same time the gradual end of production of their gasoline engine in less than a decade.
The plan still stands, but many are starting to review their strategy or, at least, to moderate their race towards 100% electric models. For some time now, the market has been sending important signs suggesting a slowdown in the growth of electric vehicle sales, with several manufacturers suggesting that hybrids will undoubtedly be part of the equation for much longer than we think.
A return to hybrids
This is the case of Nissan which has decided to review its ARC development program. Nissan plans to launch 30 new models over the next 3 years, of which 16 will be electrified and 14 will be internal combustion models. This step backwards will allow Nissan to meet the diverse needs of customers in markets where the pace of electrification differs. Nissan plans to launch a total of 34 electrified models between fiscal 2024 and 2030.
Growth that has reached a plateau
I had the chance to speak with Ponz Pandikuthira, Senior Vice President and Director of Planning at Nissan North America, during an interview on the sidelines of the New York Auto Show. He took stock of the issues concerning the electrification of the Nissan/Infiniti group, mentioning from the outset that the manufacturer realizes that all countries are not at the same level in terms of electrification, and that, in several places , electric vehicles pose several important challenges that are slowing down their breakthrough.
According to Pandikuthira, electric vehicles have reached a certain plateau, and growth will occur a little less quickly. Buyers are also realizing that fully electric vehicles are not well suited to all needs. This is particularly the case for drivers who often have to tow heavy loads, while the autonomy decreases much more quickly. Moreover, Pandikuthira mentioned that Infiniti buyers are not ready to switch to electric vehicles or at least to accept compromises.
Focus on small electric vehicles
But the crux of the matter for manufacturers is above all development costs. Mr. Pandikuthira told us that it is extremely expensive to develop electric vehicles; and even today, they are not profitable. It is for this reason that Nissan intends to choose the segments in which it will introduce its electric vehicles.
In his eyes, large electric vans are too expensive and not efficient enough. They require too many compromises, just like some SUVs. Nissan plans to launch electric models in the most profitable segments. A vehicle that doesn’t sell is one thing, an electric vehicle that doesn’t sell is an even bigger loss. The choices must be wise, and the company must be prudent. For him, we must encourage the marketing of small electric vehicles, especially those that will be affordable.
Asked why the manufacturer had not counted on the success of the electric pioneer, the Nissan LEAF, he told us that it was a question of allocation of funds. The brand had many other priorities, such as supporting the development of affordable models, but the LEAF adventure allowed them to learn a lot and discover that they now have the expertise in terms of costs and development of electric vehicles.
The manufacturer also intends to rely on its alliances and partnerships to reduce development costs. This is also the case for many manufacturers, electrification brings new partnerships which could never have seen the light of day in the past. It is, in his opinion, essential to do so if manufacturers want to fight back against Chinese brands which have already taken the lead in global sales of electric vehicles.
In a constantly changing market, we can clearly see that manufacturers have difficulty understanding the market. One thing is certain, many have decided to review their strategy in order to maintain a certain diversity, rather than putting all their eggs in one basket.
