Via Financial Times

Nissan plans to restore its pole position in electric vehicles with new products as its former boss Hiroto Saikawa admitted the value of its flagship Leaf car had been destroyed during the Carlos Ghosn era.

In an interview, Mr Saikawa, who stepped down as chief executive in September, delivered a sharp rebuke of Mr Ghosn’s hallmark EV strategy, saying deep price cuts to meet the former chairman’s sales targets tarnished the image of its battery-powered Leaf.

The criticism comes as Nissan is preparing to launch an all-electric sport utility vehicle Ariya, within the next three years, using a completely new platform co-developed with its French partner Renault and advanced production methods.

The success of Ariya, a near-production concept that was displayed during the Tokyo Motor Show earlier this month, will be critical for Nissan’s new management team as it seeks to revive a company that is wrestling with a collapse in profits and a line-up of cars that are too old.

“What really destroyed Leaf’s product value was when we vastly cut the lease price for Leaf in the US. Since then, Leaf’s image is that of a discount car,” Mr Saikawa said.

Bar chart of Unit sales, Q1 to Q3 (000)  showing Nissan leaf is being left behind

Three years after its launch in 2010, Nissan cut Leaf’s entry price by 18 per cent to $28,800 and began offering leases as low as $199 a month for three years. In a report in 2015, the National Automobile Dealers Association calculated that a one-year-old Leaf retained 44 per cent of its original price, compared with 83 per cent for Tesla’s Model S.

Nissan’s US electric car strategy was hamstrung, torn between maintaining profitability of the Leaf, and gaining market share under aggressive growth plans initiated by Mr Ghosn, according to several people familiar with the strategy.

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“It was a contradictory strategy,” said one former company executive.

Mr Saikawa told the FT the company wants “to reset the image with the kind of cars we displayed during this year’s Tokyo Motor Show,” such as the Ariya.

The blunt admission of the faltering value of its flagship electric car marks a shift for Nissan as Makoto Uchida plans to take over as chief executive on Monday.

The Japanese carmaker has long been a leader in battery EVs thanks to a major push by Mr Ghosn, who was arrested and ousted as chairman a year ago.

Line chart of Manufacturer suggested retail price in the US ($'000) showing Electric car prices have crept up over time

Leaf has sold more than 430,000 worldwide, but it has failed to establish the status symbol with consumers in the way Tesla has done with its electric offerings, in part because of its quirky design and lower mileage.

The US carmaker has ruled the EV market in the US, having sold 480,000 of its Model 3, Model S and Model X models, according to EEI.

“There is nothing to boast about in saying we sold the largest number of EVs in the world,” Mr Saikawa said. “It becomes a business only when it’s not only part of the EV category but the car is also easy to use and attractive from the consumer viewpoint.”

Global sales of battery cars remain tiny, about 1 per cent of worldwide demand.

This is expected to rise significantly as carmakers push out electric vehicle to meet emissions rules in the EU and sales quotas in China.

Despite being an early leader, over the past few years Nissan has struggled to roll out new cars, partly as it worked on a new dedicated platform for electric vehicles.

Column chart of Units (m) showing Nissan Leaf sales v other electric cars

But executives say the preparation phase is over and new products will be rolled in the next few years.

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By 2022, Nissan plans to launch eight new electric cars by 2022 and power its vehicles with its hands-off, semi-autonomous driving technology.

The carmaker on Thursday said it would invest $300m at a plant in Japan to make its production methods more compatible with manufacturing an increasing number of electrified vehicles. Ariya will be produced using this new manufacturing line where some of the tasks will be performed by robots.