Ghosn says Nissan will make electric cars in the U.S.

Posted by: Ian Rowley on June 23, 2009

It is annual shareholder meeting time in Japan and, after receiving dozens of questions from Nissan investors in Yokohama this morning, CEO Carlos Ghosn answered a few more from reporters.

Nissan’s plans for electric vehicles dominated the discussion. Ghosn, who is also CEO of France’s Renault, confirmed that Nissan will make around 100,000 electric vehicles from 2011 or 2012 in Smyrna, Tennessee. He declined to give many more details, pointing out that Nissan is still waiting to hear from the Department of Energy regarding an application for loans made under the $25 billion program created by Congress to help automakers upgrade factories to produce more fuel-efficient vehicles.

In Japan, Nissan’s EV plans continue to move ahead. On August 2, Nissan will show off the first of three EVs it plans to begin making in 2010. Renault, Nissan’s major shareholder and partner, will make three more. Ghosn says the six models will come in a range of different shapes and styles, including larger and smaller cars, and a commercial vehicle. In 2010, Nissan will make 50,000 electric cars before increasing production at its Oppama plant. In addition to the Smyrna plans in the U.S., a further plant will also be added in Europe, although its location is still to finalized.

Nissan differs from rivals in the speed in which it is planning to raise production. Mitsubishi Motors will begin delivering its electric vehicle, the i-MiEV, in Japan from next month, but currently plans to make just 30,000 a year by 2013. At over $40,000, the price is unlikely to appeal to most drivers. Nissan is basing its strategy on making electric vehicles that cost the same as regular cars when fuel costs are taken into account. To bring costs down, in addition to economies of scale through mass production, Nissan is asking governments around the world to subsidize “emissions-free” cars with tax breaks and other incentives. “We’re not into a niche strategy. We won’t come with a high price,” Ghosn said.

Coming from the charismatic CEO, it all sounds very convincing. Still, given the numerous challenges facing electric cars, including infrastructure, high battery costs, limited driving ranges and the reliance on government funding, I couldn’t help but questioning if EVs can really enter the mainstream in the next five or ten years. Ghosn, though, was even bullish enough to (once again) take a swipe at gas-electric hybrids, such as Honda’s Insight and Toyota’s Prius. He pointed out that hybrids, which debuted a decade ago, only account for 6% of new car sales in Japan this year and far smaller proportions in Europe (0.2%) and the U.S. (2.2%). “When you read articles in the press you get the impression that 30% of the car market is hybrids,” he said. “The global market share is below 1% after so many years of hybrids and huge advertising by the media.”

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Reader Comments

Rodney Maney

June 27, 2009 02:31 AM

Excellent, can't wait to see one and hopefully drive one and maybe own one!

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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