A serious threat to Tesla emerges in Nissan

Nissan recently announced a new investment of £ 13 billion ($ 24 billion in Australian cash) to help transition its business to electric vehicles (EVs). The investment centers on its Sunderland plant in north-east England, which already makes the popular Nissan Leaf, and a plan to build 23 new electric models by 2030.

But Nissan, like most mainstream automakers, has a long way to go if it is to catch up with Tesla. Elon Musk’s company is by far the world’s largest seller of electric vehicles, with the Model 3 and Y moving around 230,000 vehicles per quarter between them around the world. China’s SAIC takes second place thanks to its Wuling Hingguang Mini, which is the best-selling EV in China. Next come Volkswagen, BYD and Hyundai.

So why are many traditional players who built their businesses on internal combustion engines so far behind Musk, and can Nissan turn the tide?

Why some have struggled

Tesla created the first production electric vehicle with lithium-ion batteries in 2008 with the launch of the Roadster sports car. It has continued to develop a range of vehicles with arguably the best range, performance and efficiency in the market, as evidenced by the company’s impressive growth and profitability.

It makes sense that if you’ve been making electric vehicles over the past decade, you are probably more successful at making them now. You’ll have a lot more data on how drivers use your vehicles, what’s wrong with them, and how best to deal with engine and battery suppliers.

Nissan has certainly had its day, having launched the Leaf in 2011, which is one of the best-selling electric vehicles of all time, having sold half a million units over a decade. But if there has been a lesson in this industry, it is that success in building internal combustion engine vehicles does not guarantee success in manufacturing EVs.

An example is General Motors (GM). GM had been around since the late 1990s with its revolutionary EV1. These small cars, loved by their owners, showed what a fully electric future could look like. But GM continued to crush the EV1s en masse, saying they weren’t popular enough, though conspiracy theorists wondered if it was ever serious about bringing them to the mass market. In the process, the EV1s became the star of their own documentary.

GM tried to smash EVs again with its Volt in 2010, which was also popular until his death in 2018 (the disappearance was blamed on an aging production facility). It also launched the Bolt in 2017, which was designed to be a relatively inexpensive long-range electric vehicle. But while it does, it has been plagued by battery issues. The knowledge that bolt packs can catch fire has become so widespread that parking lots in the United States have reportedly banned them from entering.

GM says it now has a solution and has recalled tens of thousands of bolts to replace their batteries. But as a result, production of new bolts is currently on hold until the end of January. GM is also promising around 20 new electric vehicle models by 2023, but has recently come under criticism after displaying no electric vehicles at the 2021 LA auto show (which was themed on electrification). Given that President Biden recently awarded GM the leadership of the electric vehicle manufacturing industry, that surely raises eyebrows.

Toyota also played a key role in moving the industry towards greener vehicles with its hybrid cars of the late 1990s, but is also catching up. It has just, in December 2021, released its first production EV, the bZ, after going much further than others with the development of hydrogen vehicles. Toyota’s hydrogen-powered Mirai failed to gain market share in the same way as electric vehicles with batteries, selling only 316 in Europe in the first half of 2021. Toyota is also reportedly partnering with China’s BYD to launch a US $ 30,000 (approximately $ 42,000 Australian dollars) VE in 2022.

Meanwhile, Volkswagen is the historic automaker considered most likely to catch up with Tesla’s electric vehicle production rate – potentially by 2024. The German giant is spending some 35 billion euros (around $ 55 billion) in the area. But Volkswagen admits it takes them three times as long as Tesla to build its flagship electric vehicles, making the capacity gap painfully apparent. It aims to close the gap to double in 2022.

The Nissan Advantage

If we’ve learned anything from Tesla and Chinese newcomers to electric vehicles like NIO, BYD, and XPeng, it’s that bespoke electric chassis makes better electric cars. For example, Tesla’s Model 3 rival, the Polestar 2, was originally supposed to be a gasoline-powered Volvo S40, but adapting an internal combustion engine vehicle to be electric just doesn’t work as well. . You end up with cars with less battery life and often less space inside.

Fortunately for Nissan and its alliance partner Renault, they already have such a tailor-made EV platform. Known as CMF-EV, it allows the group to share a number of components between different electric vehicles and maximize the efficiency of their manufacture.

From Tesla’s observation, the second critical factor for producing electric vehicles on a large scale (and cost-effectively) is to make your batteries as close to the final assembly plant as possible, reducing costs and reducing the cost. time of transport. Again, Nissan ticks this box. Its Sunderland plant, which not only produces the Leaf but will also produce its successor, is located very close to the Envision battery gigafactory that powers it. Chinese company Envision plans to produce 38 GWh of batteries per year, enough to power 500,000 new cars, which would put Nissan on par with Tesla’s factories in the United States and China.

So, with years of electric vehicle knowledge, efficient battery supply chains, and tailor-made electric vehicle platform, Nissan could very well be the historic automaker that will eventually be able to compete with newer ones. neighborhood children. But if it fails to capitalize on its advantages to reinvent itself as an EV-first company, we have seen many other companies that being a trailblazer is certainly not enough on its own.

Tom Stacey, Senior Lecturer in Supply Chain Operations and Management, Anglia Ruskin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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