Renault-Nissan Alliance strategy for electric mobility

Renault Nissan logo

There are only two big traditional automaker groups that I consider neutral in relation to electric cars. They are Renault-Nissan and BMW. All the other are adverse towards electric cars, either by action or inaction. The Volkswagen’s case is curious and sometimes ridiculous, the company is the press release world champion when it comes to announce future electric cars, but behind closed doors the company tries its best to block legislation that favors electric cars. The funny thing about the Renault-Nissan Alliance and Volkswagen is that I always associate them with the Star Wars Rebel Alliance and the Galactic Empire, it’s not difficult to know which one is who…

 

 

 

Carlos Ghosn, the CEO of the Renault-Nissan Alliance considers himself neutral towards electric cars, he doesn’t want to make the electric revolution, but he wants to be prepared when it happens. The almost 400.000 paid reservations for the Tesla Model 3 makes it clear, Tesla Motors is the automaker that leads the revolution, every other will follow or become obsolete. Within the followers the Alliance is the group which is clearly better prepared for the transition, since the Leaf is already built in USA, UK, Japan and China (Venucia e30).

Ghosn’s lectures are very interesting, not only because he’s actually a sincere guy and speaks his mind, but he’s also a great strategist. It’s easy to understand what he wants and what he’ll do to make it happen.

 

I actually find these lectures very amusing, I watch and rewatch them while eating popcorn. But if you don’t want to watch  them completely I’ll give you the highlights:

 

 

Tokyo Motor Show

 

  • Premium electric cars are a niche and Tesla Motors is already doing a good job, the Alliance’s focus will remain the mass market.
  • Ghosn says that the crossover/SUV market is getting more popular, so we might see electric versions of Nissan Juke or Renault Captur in 2017.

 

2016 Detroit motor show

 

  • Over-the-air (OTA) software updates will become more usual for economic reasons.
  • Zero emission vehicles will become the norm regardless of what consumers want, because that’s where regulators are aiming for. The same thing happened with diesel in Europe where diesel cars were highly supported by the Governments.
  • Localization of the car production is key to sell it at a competitive price. The premise is very simple, “build where you sell”. The Nissan Leaf is already produced in four factories around the world.
  • Electric car’s problems are not technological, technology is already advanced enough to completely replace internal combustion engine (ICE) cars if the regulators want to. The problem is the “marketability” of the technology. Costs need to be reduced to balance what regulators want and what the consumer is ready to pay for.
  • Electrification of vehicles is happening, whether you like it or not. Yes Sergio Marchionne, CEO of FCA, this one was for you.
  • Upcoming electric cars from Google and Apple are only seen as a risk if you aren’t ready to make electric cars. Again, this one was for you Sergio…
  • Nissan hasn’t problems with buying batteries from new suppliers. LG Chem, Panasonic/Sanyo and Samsung SDI make your move.
  • Nissan Leaf is getting improvements before the new generation arrival. The Chevrolet Bolt will not be left without competition.
  • Range anxiety is only solved with a widespread and visible charging infrastructure. Nevertheless more range and faster charging are coming. Ghosn says that the fast charging time will be reduced from 30 to 10 minutes.
  • Nissan and BMW are building an electric fast charging network in some states of the USA. Visible infrastructure already resulted in increased sales of electric cars in those areas, even if state incentives to buy were dropped. Nissan actions towards charging station networks varies from country.
  • To effectively reduce emissions the Alliance relies in mass market cars, premium electric cars aren’t in its plans.

 

2016 Automotive News World Congress

 

  • No electric car planned for Infiniti, the focus is the mass market with the Nissan Leaf and Renault Zoe, not premium.

 

2016 NYIAS Opening Breakfast

 

  • Electric cars are the only solution to the problem of global warming.
  • Governments should focus in the charging infrastructure improvement while automakers should focus in costs reduction to lower the prices of electric cars.

 

Media Roundtable Session 2016 NYIAS

 

  • The next logical step to reduce emissions is to introduce cheaper electric cars, especially in China and India.
  • Infiniti isn’t getting an electric car in the near time. To reduce emissions the mass market is the one that needs to be electrified first, only then come luxury cars.
  • Electric cars have priority, hybrids and plug-in hybrids are relegated to a minor role in future products.
  • Weak charging infrastructure and high prices are electric car’s biggest obstacles.
  • Simpler and cheaper electric cars are going to be made for China and India.
  • Google, Apple or other technological companies developing electric cars is good because they create more visibility for this young market.

 

 

All the lectures lead to this:

 

  • The only solution for the emission problem is the electric car.

 

It’s curious that most of the questions made to Ghosn were about electric and autonomous cars. The Alliance is now seen as a high tech group, just as Toyota once was when it pushed hybrid cars. It’s sad to see Toyota having an insignificant role in electric cars.

 

The strategy is very simple and logic. For the massification of electric cars the priorities are a widespread and visible charging infrastructure and lower prices, also important but in a lower scale is better range and faster charging. But where are we now?

 

The Alliance clearly needs to step up its game, the year to date results aren’t good.

The most sold plug-in car in the USA is the Tesla Model S, that Ghosn considers to be in a niche market, while the Nissan Leaf that is considered a mass market car is in fifth place.

In Europe, the Nissan Leaf is relegated to third place. But at least the most sold plug-in car title is in the family with the Renault Zoe being the number one. The Mitsubishi Outlander PHEV is the number two.

 

Carlos Ghosn reaction to the Chevrolet Bolt

 

The upcoming Chevrolet Bolt and the recently improved BMW i3 are the most direct competitors to the Alliance’s electric cars. With the right price, the Renault Zoe R400 and the facelifted Nissan Leaf shouldn’t have much problems getting the top positions of the most sold plug-in cars. The range provided by the 40 kWh batteries is enough in most cases, especially with the increasing number of public charging stations. While 60 kWh batteries are great, the more affordable and lighter 40 kWh batteries provide a great balance between range, cost and efficiency.

It’s very likely that the Renault Zoe R400 will have 100 kW fast charging capability with the CCS standard, the same isn’t true for the facelifted Leaf. Charging at 100 kW will only be possible if Nissan starts using a TMS (thermal management system). Dropping the CHAdeMO in the USA and Europe in favor of the CCS standard is also a strong possibility.

One thing is clear, Nissan is well prepared to regain the leadership. The company already produces the Nissan Leaf in four different locations around the world, it has the high volume production capacity advantage that no other has yet. It’s time to increase production and drop the prices.

 

 

More info:

http://nissannews.com/en-US/nissan/usa/releases/nissan-and-bmw-partner-to-deploy-dual-fast-chargers-across-the-u-s-to-benefit-electric-vehicle-drivers

http://blog.alliance-renault-nissan.com/

http://insideevs.com/monthly-plug-in-sales-scorecard/

http://ev-sales.blogspot.pt/search/label/Europe

This Post Has 11 Comments

  1. With the Bolt at 37.5k US and Model 3 at 35k (assuming it is on time) I would think that Nissan needs to drop the price a couple if not several thousand dollars even with the larger battery and the face lift…
    It certianly would be nice if they switched to CCS and added TMS…
    If Nissan switches to LGs batteries without TMS while GM and Ford are using them with TMS who would you trust??
    It will be interesting to see how they along with VW, Ford, and Hyundai all price their new or upgraded cars…

    “The strategy is very simple and logic: better infrastructure, price reduction, better range and faster charge. But where are we now?”
    I would guess two years away on all counts as the model 3 will hopefully be out in mass to further push big auto to compete or potentialy lose customers permately…

    1. I think that Nissan isn’t being pushed by Tesla Model 3. Different price tags. BMW in the other hand… is getting very worried. Latest BMW 330e ads prove it. They might release the 120 Ah cells for the BMW i3 sooner than what they expected. BMW also needs more aerodynamic and sporty BEVs, the i5 and i6.

      Nissan can already drop 5.000 € to the price of Nissan Leaf and still make more money selling it than selling a Pulsar or a Note.

      I believe the prices for the facelifted Leaf are going to be around:

      30 kWh – 25.000 €
      40 kWh – 30.000 €-34.000 € depending on trim and equipment

      TMS and CCS are very important. I don’t see LG Chem giving a good cell’s warranty to Nissan without TMS. Let’s see what happens to AESC. The facelifted Leaf is a great opportunity to add the TMS. If Nissan wastes it, it’s a big screw up.

    2. Nissan must not drop the price. The 35$ from Tesla are fixprice. While you can get normal discounts in USA from 4000 – 8000 $ (also Canada). So if you equipe your Leaf (starts 29k $) with everything you can get you have a MSRP of 37k $. But the big difference is that there are official offers from Nissan US or dealers and after you will be at ~ 29k $.
      And imagine, a 60 kWh Leaf second generation which will also come mid 2017 for lets say 38k $ and after offers you get it for 32k $. And a base Leaf or average Leaf is between 22k $ – 30k $ BEFORE incentives. In Europe the gap will be even bigger because Model 3 is produced in US.

      1. I would rather skip all the dealer games and have up front pricing which in itself is a reason to buy a Tesla…

      2. I disagree. They won’t be competitive against Bolt/Ampera-e unless they drop the price.

        Don’t know what your source is for a second-generation LEAF appearing in mid-2017. I personally don’t expect it to come so soon after the facelifted LEAF to be unveiled in Paris – but I don’t have any inside information, so this is pure speculation on my part.

        With a lower price and a more efficient car, especially at higher speeds, and 46 kWh gross capacity, the 2017 LEAF, and even more so the ZOE, should be able to go 90% of the distance the Bolt can go on highways.

        There’s no word on it yet that I’ve seen, but I also expect both the LEAF and ZOE to get a torque and power bump-up that brings them closer to the Bolt in these respects as well. All in all, that makes them very competitive if and only if the price is also a bit lower than the Bolt’s.

      3. I also think that we will see Leaf 2 first half 2017. Nissan will bring the new batteries (something like 30& 40 kWh) in the MY 2017, we should see in Paris just 36 days away. And after that, they are preparing for Second Generation. They also will show second Generation this year, was in an article in insideevs. I suppose in Los Angeles Autoshow.
        Here Jay Cole confirmed Leaf 1 will be not long produced as many think:
        http://insideevs.com/nissan-leaf-sales-us-july-2016/#comment-954941

        The debut will be around 4-6 moths before Leaf 2 is at dealer, between you can get a Leaf 1 with the new battery options of Leaf 2.
        “debut of the next-generation LEAF (which will happen in the very near term – trust us)”
        http://insideevs.com/can-nissan-maintain-electric-car-leadership-role/

        I am sure insideevs are right, because to very close in a friendship contact to one employee from Nissan North America.

  2. I am pretty sure every incumbent would prefer if EVs didn’t happen. This is only logical! From their perspective, it means a lot of development expenses and risk. For instance, what if you adapt a new battery chemistry based on extensive testing, but it turns out to have issues the testing did not reveal? This could be devastating to a manufacturer if EVs are a big share of their sales.

    Another reason for incumbents to wish EVs weren’t happening is that the technology leads to a considerable simplification of car manufacture. To be sure, there will still be big obstacles to entering the car industry. But compared to ICEVs, the barriers will be lower. Standard economic theory predicts lower profit margins when the barriers to entry are lower. Obviously any business in any industry would like conditions that tend to maximize their likely future profit margins.

    If you look at how most car companies work today you will also quickly discover that the internal combustion engine and transmission that EVs make obsolete are precisely where their core intellectual property resides. The car makers neither design nor produce most of the other components – instead, there is a large industry of suppliers of auto parts that sell to all of them. A modern car business is to a large extent proprietary engine and gearbox technology combined with more or less commoditized suspension, chassis, electronics and so on. For instance, Bosch supplies a ton of the electronics systems across the spectre of manufacturers.

    Even though sunk cost is sunk cost, it is well-known that humans tend to feel a strong reluctance to just let go of what has already been invested in. This is a further reason why incumbents would not want EVs to happen.

    All of this having been said, I agree that not all of the incumbents BEHAVE identically. In the case of Carlos Goshn, I think he pretty much speaks the truth: his calculation is that EVs will happen, regardless of what may be expedient for incumbents. What he doesn’t say, but I read between the lines, is that he calculates it is better for Nissan/Renault to then stay out of the politics and not risk tarnishing the brand by lobbying against it, instead focusing all of his attention on preparing for the inevitable.

    BMW may not have been lobbying against EVs – I don’t know. But I don’t think they deserve the same “classification” (as “neutral”) as Nissan on the matter. BMW has been nowhere near as frank and clear as Nissan, which has “always” been saying clearly that EVs are far superior with respect to environmental impact. BMW was much later to the game. They are working for rules to favor PHEVs that only require a tiny battery and a short all-electric range to qualify for preferential treatment by government, when the technology to go much farther is readily available.

    Compared to the likes of Ford and (especially) Chrysler I guess they have kept their path reasonably clean. But in my book, Nissan and Tesla are the only ones to score highly in terms of how moral their behavior has been. Tesla obviously has a very special role, but it would be crazy to expect or demand the same from an incumbent. In my view, Nissan/Renault has acted (as far as I know) with integrity the whole time and stayed out of politics. That is the appropriate way to behave, even if I think they do so not out of a greater respect for the role of corporations but simply different (more intelligent) assessments of what is most profitable to do.

    Lastly, a more general point: While the public seeing some companies as good and some as evil can perhaps help put pressure on incumbents to improve, it really is an ineffective way to achieve change. I think it is a real pity that there is so much talk about the manufacturers and so little talk about the regulators. In a democracy we are supposed to get governments that put the interests of the people first. But the regulators around the world are largely passive and they rely far too much on analysis and opinion coming from the *financially* interested parties – first and foremost the manufacturers. This is a problem, but the solution is not to aim for some sort of utopia wherein corporations prioritize the greater good rather than their own profits. Our capitalist system ensures corporations MUST prioritize their own profitability – it is eat or be eaten. Anyone who compromises their own profitability for any length of time risks either going bust or being acquired by a more profitable competitor – who then can change how the company operates to match it’s own “more evil and more profitable” ways.

    The VW diesel scandal illustrates this rather well. First, look at the HUGE discrepancy between how VW is treated by the American government and the European one. I for one have no doubt that this has a lot to do with the fact that VW is German and a huge employer in Europe. And why is it legal to emit ten times as much NOx in EU as US? Surely because European manufacturers have an edge in diesel technology. Why does the US car fleet on average use double the fuel European ones do? Surely because European manufacturers have the advantage in making efficient cars. That is ultimately why fuel is so cheap in America – changing that would hurt Detroit.

    There is also gross incompetence and governments again rely far too much on simple delegation to the manufacturers. Why did it take the EPA many years to discover that the VW cars had entirely different results in real-world use? And how – as revealed by the huge data set released by Emissions Analytics about diesel cars in Europe – is it possible that 97% of diesel cars in Europe emit much more than the legal (lab test-based) limits in real-world use? A quarter of the cars released more than SIX times the (already liberal European) limit.

    Tens of thousands of people, especially in cities, get lung diseases and die a year or more sooner than they otherwise would as a result of regulators being far better at playing politics than they are at doing the jobs they are supposed to – such as protecting the environment, ensuring breathable air, maximizing citizen’s health and happiness. And yet there is a hundred times more talk about the “evil manufacturers” than there is about regulators that allow the madness to go on, perfectly legally.

  3. One more thing: You uncharacterisically fell into the trap of conflating hybrids with EVs in saying the LEAF is third in Europe. It is never helpful not to distinguish between a PHEV, especially a short-range one, and an EV (a BEV). Far better to say the ZOE and LEAF are the top two EVs and Outlander the leading chargable hybrid. (Chargable sounds odd because we’re so used to “plug-in”, but with wireless about to take over I think we might as well begin to get used to it!)

  4. And what about the rumors that ZOE will get a battery upgrade for existing ZOEs?
    Many people hope for it – and some dealer already tell that there WILL be an upgrade available

    But if you look on Nissan Leaf 30 kWh battery – they did not make an upgrade for 24 kWh models.

    1. Since Renault pushed the battery leasing scheme saying that future battery upgrades would be possible, it’s likely they’ll offer the possibility. But probably most costumers will prefer to trade the whole car for a new one, since the upgrade will be expensive. Similar to what BMW does with the i3.

      Asking 5.000 € for Zoe’s battery upgrade while keep charging for a monthly rental is a bit scammy.

      https://pushevs.com/2016/02/23/how-much-do-you-want-a-zoe-with-300-km-range/

      1. And that is what the japanese guy said at the end of the video in your linked article

        Lets hope we will get the possibility to ramp up to 40 kWh soon 🙂

Leave a Reply

×

Cart