With electric car production and sales not moving up as was anticipated, Nissan’s boss Carlos Ghosn, has ordered deep cuts in production. This has created division with alliance partner Renault, say informed sources.
Consequently it is believed that Nissan like Renault will depend more on cheaper batteries made by South Korea’s LG Chem to power future models of electric vehicles.
Market sources say that demand for electric cars have generally remained sluggish due to the slow rollout of recharging facilities in spite of incentives available in important markets. Sources also say that Ghosn’s prediction that electric car production and consequently the demand for batteries will peak 1 million in 2020 also seems impracticable, say some.
According to reports, an unnamed executive on condition of anonymity told, “We set out to be a leader in battery manufacturing but it turned out to be less competitive than we’d wanted,” Elaborating on his statement he added, “We’re still between six months and a year behind LG in price-performance terms.”
Those with insider knowledge about the Nissan-Renault battery alliance say that Renault too will source its needs for batteries from LG. An insider-source said, “Renault would clearly prefer to go further down the LG sourcing route, and the Nissan engineers would obviously prefer to stay in-house,” Still another insider said, “The write-off costs are potentially huge.”
An Exane BNP analyst says the investment in the alliance was premature, he said, “Renault-Nissan were definitely ahead of their time – in a bad way.”
