Increased consumption of natural resources and the impairment to our environment has caused many countries to regulate the usage of gas vehicles and promote electrical vehicles.
One among these countries striving hard to limit gas vehicles is China.
Very recently Japanese automaker Nissan motors has collaborated with its Chinese joint venture partner to invest about $10 billion in China to boost development of Electric cars and to increase annual sales by one million vehicles.
The total sales of sedans and SUV’s and minivans rose from 24.7 million units in the current year but the market for gasoline-electric hybrids still remains as small as 2.7 percent, accurately what the venture for 5 years targets at expanding.
Nissan and Dongfeng plan to develop 20 new electric car models in the upcoming years that will be sold under Nissan, Dongfeng as well as Nissan’s high end brand Infiniti.
The aim is to increase production and sales from 21,000 units to 3, 60,000 units through this venture. “We need to accelerate cost reduction but to reduce cost we need more volume” said Seki, president of joint venture, Dongfeng Motors Ltd.
And in order to pump up the electronic vehicle volume Nissan plans to design low-cost electric cars by locally sourcing electric motors and other key EV components from suppliers in china, helping local companies that might become future competitors to develop electrics.
In 2019, Nissan for example plans to launch three such lower-cost EVs under the Venucia name. “We expect EV and e-power hybrid business to become profitable,” Seki said, without elaborating
The probable reason for Nissan’s failure in the sales of electrics is due to its relatively high sticker prices of models that contain up to 85 percent imported components.
With the Chinese market auto market dominated by General Motors co and Volkswagen AG, Nissan is trying its level best to break away from the second-tier group and make it to the top 3 china automakers.
Though Beijing has made elaborate plans on transitioning China away from gas powered vehicles the appeal of electric cars in China still heavily depends upon subsides.
Beijing is pushing automakers to develop technology and these automakers face quotas that require electrics to make up at least 10 percent of their sales starting next year.
DLF is also making an attempt at electrifying 30% of its overall sales. They are consciously aiming at providing electrified driving performance with class leading connectivity and autonomous driving capabilities.
All in all this joint venture aims at a target to increase about 1.6 million units of annual sales by 2020 and to increase their global revenue by 3.7 trillion by 2022.
The venture also plans to turn INFINIT’s 25% portfolio electrified by 2022 and fetches to transitioning to 100% by 2025.