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Nissan has unveiled a comprehensive electrification plan for the first time as it makes $17.5 billion available to be spent in the next five years.
The recent move by Toyota Motor Corp (TYO: 7203) and Tesla Inc (NASDAQ: TSLA), to accelerate their electrified vehicle (EV) plans has forced Nissan Motor Co (TYO: 7201) to spend as twice as it did in the previous decade for a share of the EV market. Japan no. 3 automaker has in a recent announcement unveiled a comprehensive electrification plan for the first time as it makes $17.5 billion available to be spent in the next five years. Nissan also announced its electrification plans that include the launch of 23 new models by 2030 including 15 all-EV vehicles. It has also publicly disclosed its plan on reducing Lithium-ion battery cost by 65% in the next eight years. As part of its plans, the Automaker will introduce all-solid-state batteries by 2029.
According to the CEO Makoto Uchida, the idea is to make EVs more affordable to drivers as it creates the future.
“We have a 10-year head start over competitors with electrification. We will leverage this experience and speed up the shift with further investment. The time is right for us to shift gears from focusing on business transformation to creating the future, ” he said.
Many experts appear unimpressed with the plans of Nissan as they think the Japanese automaker is far behind its rivals in electrification. On Monday, its shares dropped by 5.6% compared to its major rivals According to Masayuki Otani, senior analyst at Securities Japan LTD., the shares fell because of the rising concerns that the new coronavirus variant may affect production.
“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.
Data released by the International Energy Agency (IEA) showed a rise in demand for electric cars as global electric car registration rose by 41% in 2020. Nissan has made efforts to take advantage of the growing demand for EVs as it plans to build a battery plant in Britain to power 100,000 cars a year. To facilitate this move, it pledged $1.4 billion in July with its Chinese partner Envision AESC.
At the UN climate summit at Glasgow, major carmakers signed a declaration to phase out fossil fuel vehicles by 2040. Though Nissan has not pledged to phase out gasoline vehicles, it revealed that half of its vehicle mix would be electrified by 2030. Chief Operating Officer Ashwani Gupta believes that it is important that the company shows its vision.
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,” he said.
Also, Uchida has assured that they will make efforts to democratize electrification.