Nissan backtracks with hybrid move
When Nissan launched the world’s most popular battery electric powered vehicle back in 2010, the Nissan Leaf was seen as the way forward for the company. In effect, Nissan had decided to jump straight from gasoline vehicles to fully electric powered vehicles, therefore, missing out the hybrid market. However, Nissan has now announced plans to release the Nissan Note e-Power which is a gasoline powered hybrid vehicle.
Why the change in strategy?
Even though the Nissan Leaf has sold more than 250,000 cars worldwide, sales figures have not hit expectations. The company invested large amounts of money into electric cars and quite frankly needs to make this work in the longer term. The general take-up of electric vehicles around the world has been much slower than many had anticipated which is extending investment criteria and reducing the immediate return on capital invested.
As a consequence, Nissan has been forced in many ways to revert to hybrids as a stepping stone from gasoline vehicles to their electric counterparts. The idea is that those who are “late to the party” will switch from gasoline to hybrid vehicles and then the move to fully electric vehicles, such as the Nissan Leaf, would not be such a big leap. This certainly makes sense, and while backtracking on the company’s previous strategy, it shows foresight and ability to recognize a strategy which was not working as perhaps it should have been.
Reduced costs going forward
In effect, a hybrid is an electric car which also has a gasoline-powered motor which charges the batteries. The ability to switch from pure electric to hybrid power gives motorists more confidence they will get from A to B with journey anxiety a major problem amongst those yet to sample electric vehicles. As a consequence, the Nissan Note e-Power will already utilize the vast majority of Nissan Leaf components offering further cost savings to the company going forward.
Upscaling production of components has been a major problem for some electric car companies because if they are not selling sufficient vehicles, they may not be crystallizing volume savings. However, this move by Nissan will effectively see two hopefully award-winning vehicles using pretty much the same components and therefore increasing manufacturing volumes.
Stepping backward to step forwards
One of the main problems for the electric car market has been the concern among some motorists about jumping from gasoline powered vehicles to electric cars. The hybrid market is supported by many leading car manufacturers although Nissan and others chose not to focus their investment on hybrids and instead moved straight to electric cars. The decision by Nissan to effectively take a step backward is extremely sensible from a business point of view and will allow the company to step forward in the medium to long term.
If someone unsure of electric powered vehicles can sample a hybrid vehicle first, there is more chance they will eventually move to fully electric. If both of these vehicles are manufactured by Nissan then hopefully the confidence in the hybrid will encourage a smooth move to the Nissan Leaf. It may seem that Nissan is admitting defeat in its historic strategy, but this is an extremely clever move which will ultimately increase electric car sales.