In a move to stay ahead of the curve amidst stiff competition, Nissan, the Japanese auto giant, has laid out plans to cut down production costs for its next-generation electric vehicles by 30%, as it vies with the surging presence of Chinese rivals in the market.
As part of its newly announced mid-term strategy, Nissan declared its aim to manufacture electric models by 2030 at a price parity with conventional combustion engine vehicles, signaling a bold move towards affordability in the electric vehicle market.
In addition, the company set forth a goal to achieve a one million increase in annual vehicle sales worldwide within the next three years.
CEO Makoto Uchida, while promising to enhance the company’s overall financial performance worldwide, conceded that Nissan has encountered challenges in the Chinese market.
“Honestly speaking, we have struggled there in terms of sales volume. In the last five months, things have improved somewhat. But still, our capacity remains excessive,” he said at a news conference.
“By working with joint venture partners (in China), we will continue to optimise our production levels and work with products that allow us to grow in the market.
“We are focused on providing what Chinese customers want,” Uchida said.
Nissan said it would achieve “significant” cost reductions in producing cutting-edge electric models “through grouped ‘family’ development, with vehicle production under the approach starting in fiscal year 2027”.
“Family” development refers to the use of common components in various vehicles.
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Nissan also said it would reduce the cost of next-generation EVs by 30 percent by “integrating powertrains, utilising next-generation modular manufacturing, group sourcing, and battery innovations”.
This month Nissan and rival Honda said they were exploring a strategic partnership in electric vehicles to face up to a “once-in-a-century” industry upheaval — a move analysts said was aimed at catching up with Chinese competitors.
Assisted by its unparalleled supremacy in electric cars, China dethroned Japan as the world’s foremost vehicle exporter last year, signaling a notable transformation in the global automotive export landscape.
Benefitting from substantial government backing, Chinese electric vehicle firms have surged ahead of their established rivals.
While Chinese companies like BYD have embraced electric vehicles with fervour, Japanese giants such as Toyota and Nissan have taken a more cautious approach, placing greater emphasis on hybrid models.
As part of its Monday announcement, Nissan outlined its goal to release 30 new models over the next three years, with 16 of them being labeled as “electrified.”
“If you look at our product portfolio, in the future the number of ICE (internal combustion engine) vehicles will decline, but they are very important for our business,” Uchida said.
Nissan announced in February a downward revision of its unit sales volume projection for the current fiscal year, decreasing it from 3.7 million vehicles to 3.55 million, citing “temporary logistics disruption and heightened competition.”