Nissan's new EV push to strengthen brand image

YOKOHAMA, Japan — Just as recently troubled Nissan Motor Co. regains traction in its key U.S. market, it is placing a multibillion-dollar bet on radically rebuilding itself again, this time around electric vehicles.

CEO Makoto Uchida said the new push to dramatically expand Nissan's U.S. sales of battery-electrics by 2030 will do more than springboard off the automaker's recent recovery. It will also accelerate the carmaker's upmarket move, he pledged, by burnishing the high-tech credibility of the Nissan and Infiniti brands.

"Our brand image has improved, and the new products are promising," Uchida told Automotive News at the company's headquarters here. "Now we are entering the next phase of how we can extend our brand power to reach customers. ... We would like to further the customer's recognition of our brand power in terms of the electrification that's coming."

Nissan's long-term plan, announced in late November, envisions getting 40 percent of its U.S. sales from full-electric vehicles by 2030 — from a mere 1 percent today. For perspective, it currently offers only one EV — the long-in-the-tooth second-generation Leaf hatchback. Nissan sold 10,074 Leaf vehicles through September, a fraction of Nissan Group's 782,656 U.S. sales in the first nine months of the year.

Even assuming stagnant sales at today's pandemic-depressed levels, Nissan's U.S. target implies a rapid expansion to sales of about 360,000 electric vehicles a year. But if Nissan's U.S. sales should rebound to historic highs above 1.5 million, the new goal would represent annual EV sales as high as 600,000.

The gambit hinges not only on Nissan's ability to supply that many vehicles, but also on U.S. shoppers being ready and willing to buy them.

Nissan's EV breakout begins with the U.S. arrival of the Ariya all-electric crossover next fall, which kicks off a global blitz of 15 new electrified vehicles through 2030. The ramp-up entails creating a U.S. EV production hub and commercializing solid-state batteries, which will enable Nissan to offer all-electric versions of bigger vehicles, possibly even pickups.

The U.S. plan potentially includes bringing Nissan's e-Power hybrid setup to North America. But Uchida said the company is still monitoring customer attitudes toward that technology. Also, e-Power is not included in the company's 40 percent EV target; any e-Power sales would be on top of that.

The majority of models in Infiniti's lineup will also be full-electric by 2030, even as the premium brand continues to offer e-Power and traditional gasoline-powered vehicles.

Many details remain to be fleshed out. While Uchida said Nissan will be prepared to reach a 40 percent EV ratio, he didn't say how that would be achieved, nor did he describe the 2030 lineup.

"We are not just setting a number of 40 percent. We have a plan behind it," he said. "But it's not the time to say that in the detail."

Even the 40 percent target comes with wiggle room. Nissan has aligned the ambition with the goal set by President Joe Biden to achieve a sales rate of 50 percent zero-emission vehicles by 2030. Uchida said Nissan will adjust its own rollout to match the market's real EV adoption rate.

IHS Markit predicts only a 34 percent U.S. adoption rate for EVs in 2030. Electric vehicle sales in the U.S. were up 88 percent through September and are on pace to set a record in 2021, according to Cox Automotive. But they still account for a minuscule 3 percent of the total market.

Nissan has been disappointed before.

In 2011, the Japanese automaker — then under the leadership of former CEO Carlos Ghosn — thought it could sell 1.5 million EVs cumulatively by 2016, together with its alliance partner Renault. But the alliance missed that goal by 1 million vehicles.

Uchida also declined to say how reliant his strategy will be on a steady flow of government subsidies for EVs. And he is not yet specifying how Nissan will divvy up the ¥2 trillion ($17.73 billion) it plans to invest in electrification over the next five years. About $1.24 billion will go toward developing solid-state batteries on the way to bringing them to market around 2028. But a deeper breakdown will have to wait until the next midterm business plan, Uchida said.

As global automakers race to pile hundreds of billions of dollars into transforming themselves into EV players, Uchida said it is still too early to say what is the right level of funding.

"Our investment of ¥2 trillion — is that over-investing? We don't know. But this is what we think is right as far as our direction is concerned," he said. "But we are talking about the next five years. We will carefully monitor how the market evolves. Then we will adjust to the right level."

Uchida, who took the helm in December 2019 during the thick of the Ghosn scandal, calls his Nissan Ambition 2030 plan a "compass" pointing toward the company's future direction. The nuts and bolts of how to get there will come after the company wraps up its current midterm plan, Nissan Next, a restructuring strategy that ends March 31, 2024.

So far, Uchida said, the company is well on its way to rebuilding from two years of back-to-back losses, including the company's biggest-ever operating loss, posted in the last fiscal year.

"Now that we have a certain level of visibility of the company's recovery, we thought it was the right time to go to the next step and shift our gears to creating the future," he said when unveiling the plan.

"I'm very happy with how solid our U.S. business has become in terms of quality of sales," Uchida told Automotive News. "We have restored the value of our vehicles in the U.S. to the right level. And we did not push sales, which made our reputation and trust among U.S. dealers much better."

Uchida said Nissan's U.S. operations bottomed out in early 2020 and have been improving ever since. Nissan Group's U.S. sales climbed 19 percent to 782,656 vehicles through September, in an overall industry up 13 percent. Market share rose to 6.6 percent, from 6.3 percent. Incentives are coming down, and revenue per vehicle sold is rising as profitability returns.

The Rogue-sized Ariya EV will start at $47,125, including shipping, and will compete against the likes of the Volkswagen ID4, Ford Mustang Mach-E and Tesla Model Y. The new nameplate, which gives Nissan a crucial entry in the hot electric crossover segment, is a sign of the upswing, Uchida said.

"This is going to be our game-changer. This is one of our proof points of what Nissan is doing with electric vehicles, including the driving pleasure and excitement," Uchida said.

"Our message about fully electrified vehicles toward 2030, and how we demonstrate our brand image toward that goal, is going to be most important."