While Tesla is busy building its enormous Gigafactory in Nevada, Nissan has started talks with Japanese and Chinese companies to sell its stake in the battery production joint venture it created with NEC a decade ago. It says buying batteries from outside suppliers will help it hold prices down.
The joint venture, Automotive Energy Supply, was set up in 2007 to make lithium-ion batteries for Nissan’s LEAF electric car and other hybrid vehicles. It is owned 51% by Nissan and 49% by NEC. Automotive Energy has the second-largest share of the world market for lithium-ion batteries for cars with $362 million in sales in the fiscal year that ended in March (though, BYD has jumped into #2 in the first half of 2016). Nissan is looking to sell its entire stake in the venture. It also plans to sell its independent battery manufacturing operations in the USA and Britain.
Panasonic, which is a partner with Tesla Motors in the Gigafactory venture, is the world’s largest battery company (by far). It has expressed an interest in buying Nissan’s stake in Automotive Energy. Nissan expects to select a buyer by the end of this year. The decision is expected to speed consolidation in the battery industry, according to analysts.
When Nissan was developing the LEAF a decade ago, there were few manufacturers making batteries for electric vehicles, which led the company to believe making its own would be the most cost-effective way forward — or, at the very least, that it was just necessary at the time. But now it needs to cut the cost of the batteries it uses in order to remain competitive in the growing EV marketplace. Because it makes batteries only for its own use, Nissan has few economies of scale and limited ability to cut costs.
The difference between how Nissan and other automakers are approaching the battery supply issue and how Tesla is doing so could not be more stark. For most car companies, batteries are an afterthought, something to be sourced from an outside supplier like seats, tires, and other components.
Tesla, on the other hand, views batteries as key to its overall goal of showing the world how it can wean itself from its addiction to fossil fuels. Tesla is not a car company that also happens to make batteries. It is a battery company that also happens to make automobiles. That difference may loom large in the years to come.
Source: Nikkei Asian News