Nissan, which forms an alliance with Renault, hinted that it may consider to close down the company's battery production sites in the U.S. and UK. The automaker, considered the world's biggest electric car manufacturer, also plans to reduce the number of batteries made at its domestic plant.
The Renault-Nissan Alliance is instead considering to source batteries from the South Korean company LG Chem which the Alliance would use for its upcoming electric car models, including models that will be manufactured in China.
The plan had faced a strong resistance within the Japanese carmaker. "We set out to be a leader in battery manufacturing but it turned out to be less competitive than we'd wanted," said one executive who requested to remain anonymous. "We're still between six months and a year behind LG in price-performance terms."
The decision to discontinue the operations at the battery plants in Smyrna, Tenn. and Sunderland, England shall be finalized next month. This shall be made following a procurement analysis with Renault which holds 43.4 percent of the company's share.
One insider commented that Renault would, in no doubt, prefer to go ahead with the LG sourcing plan. Furthermore, it's highly understandable that Nissan engineers would choose to stay in-house.
At present, the Alliance offers five electric models in its UK market. These include Renault ZOE, Renault Kangoo ZE, Renault Twizy, Nissan e-NV200, and Nissan LEAF. The latter has its batteries produced in Sunderland. Meanwhile, the battery cells for the e-NV200 model are shipped from the Sunderland facility to Barcelona where the electric van is assembled.
Under CEO Carlos Ghosn of the Alliance, Renault-Nissan invested heavily on electric-focused cars compared to any competitor in the same mainstream. In 2009, the Alliance made a $5.2 billion worth of pledge to create models that would include the Nissan Leaf and a whopping half a million batteries every year for the car's power sources.
Moreover, Nissan and NEC ventured on a $215 million investment in their electrode manufacturing facilities and battery plant in Zama, Kanagawa Prefecture. The venture, which is supported by government aid, was also made possible with the help of British taxpayers. The battery plants in Tennessee and in Sunderland are said to have a total investment worth $1 billion and $341 million respectively.
The next generation of electric car batteries will contain the lithium NMC cathodes instead of the lithium LMO that is currently used by the Alliance. The cost target is set at $200 for every kwh, whether the battery is made or bought.
Nissan engineers believe that their next generation of batteries could prove to be at a competitive stand in the market. "What's important to us is that electric car performance fully meets customer expectations," adds Ghosn.
