Date: May 19, 2022, 12:41 p.m.
Nissan is anticipated to disclose a new US battery source for its later this decade-slated introduction of its next-generation electric vehicles.
The announcement of the supplier’s identity will be made “in a few weeks,” according to Jeremie Papin, president of Nissan Americas, who made the statement at the Automotive News Congress.
It’s really fascinating, as now, Nissan uses lithium-ion batteries from Envision AESC, which has announced a proposal to build a $2 billion gigafactory in Kentucky. Nissan still owns a small portion of Envision AESC, a previous Nissan joint venture with NEC that Envision Group just bought.
In the US, the Smyrna, Tennessee plant of Envision AESC manufactures batteries for the Nissan LEAF (at the Nissan vehicle factory). There are further battery plants in China, the UK, and Japan. We anticipate that the future Nissan Ariya will continue to use Envision AESC as its sole/primary battery provider.
“The battery provider and the car maker must be in close contact with one another. A battery-electric vehicle is fundamentally built on the knowledge that the two are sharing.”
Therefore, the question of whether Nissan plans to include another battery manufacturer in Envision AESC and how it might be connected to ASSB arises.
In This Article...
Nissan begins construction on a lithium-ion battery factory in Tennessee.
Nissan started construction on the initiative to manufacture the Nissan LEAF in the US on May 26. The construction of a factory in Smyrna, Tennessee, which will create the lithium-ion batteries used to power the Nissan LEAF zero-emission vehicle, has officially begun with the groundbreaking ceremony. Nissan’s Smyrna vehicle assembly plant will start producing the all-electric Nissan LEAF in 2012.
When the plants are running at full capacity, up to 1,300 employment will be generated through Nissan LEAF and battery manufacture. At full capacity, the battery plant, one of North America’s largest automotive battery manufacturing facilities, will be able to produce 200,000 advanced-technology batteries yearly. It will be next to the auto assembly factory, which will be redesigned to support Nissan LEAF production and have the capacity to build 150,000 electric vehicles yearly.
“Nissan is dedicated to providing accessible, eco-friendly transportation. What we’re doing here will fundamentally alter how consumers experience the car industry. Today marks an important milestone in the development of a green economy in the United States “said Nissan Motor Company Ltd. president and CEO Carlos Ghosn. “Nissan LEAF and lithium-ion battery production in Smyrna advances the country’s pursuit of energy independence, generates green jobs, and supports domestic manufacturing. Nissan already leads the world in manufacturing innovation, and new cutting-edge battery plant will only solidify that position.”
According to Tennessee Governor Phil Bredesen, “Tennessee has emerged as a national leader in promoting sustainable energy innovation, and Nissan’s decision to establish this advanced-technology battery factory here in Tennessee is a major component of that accomplishment.” “Nissan’s investment in Tennessee dates back more than 20 years, and this new manufacturing facility paves the path for the state’s next wave of automotive and renewable energy jobs.”
Initially funded by a U.S. Department of Energy loan for 80% of that cost, up to $1.4 billion, the building of the battery factory and renovation of the Smyrna manufacturing facility to enable Nissan LEAF production comprise an investment of up to $1.7 billion.
The $25 billion Advanced Technology Vehicles Manufacturing Loan Program, which Congress established as part of the Energy Independence and Security Act of 2007, was the vehicle used to grant the loan. The program aims to hasten the creation of cars and technological advancements that boost American energy independence, produce cleaner modes of transportation, and boost the nation’s economy.
2% of the market
The Automotive Energy Supply Corporation (AESC), which had its origins in Japan, was founded in 2007 as a partnership of Nissan, NEC, and Tokin Corporation to produce lithium-ion batteries for electric vehicles. Production of lithium-ion batteries for the Nissan Leaf battery-electric car began at AESC in the latter part of 2010. AESC was acquired by the Chinese Envision Group in 2018, who also changed the name of the battery manufacturer to Envision AESC.
Envision AESC currently operates operations in Zama, Kanagawa, Japan; Smyrna, Tennessee; Sunderland; and is currently building a facility in Wuxi, China. The corporation also revealed plans to construct two additional megafactories—one in France and one in the UK—to support Nissan and Renault’s European EV output.
Envision AESC is really behind the Chinese battery manufacturer CALB, which isn’t one of Benchmark’s Tier One battery suppliers, but it is the eighth largest maker of lithium-ion EV batteries (it was once second, behind Panasonic). Between January and April 2021, Envision AESC had a capacity of 1.3 gigawatt-hours, or 2% of the market. Comparatively, CALB holds roughly 2.7% of the market in 2021.
Reading ahead
The decision was made in light of the UK-EU trade agreement, the Japanese automotive titan told the BBC earlier this week. In the event of a no-deal Brexit, there had been rumors that the corporation would close the plant or perhaps move manufacturing elsewhere.
The batteries Nissan now uses in Leaf EVs built at the Sunderland plant are imported from Japan. It anticipates that investing in regional battery manufacture will cut emissions associated with logistics and assist the company in adhering to EU-UK trade regulations. Notably, in order to qualify for zero-tariff exports, a car must have at least 55% of its value come from the UK or EU.
Nissan’s chief operating officer, Ashwani Gupta, stated, “Being the largest manufacturer in the UK, we are taking this opportunity to redefine auto-making in the UK.” He did not, however, say whether the choice will result in more employment being added to the Sunderland factory. There are currently 6,000 direct workers at the facility.
The announcement comes at a critical time for the UK and EU auto manufacturing industries. In addition to Brexit, businesses are being forced to change their model plans because Boris Johnson just pushed back the ban on the sale of new gasoline and diesel vehicles until 2030.
The UK government had first imposed a 2040 deadline on the ban on the sale of new gasoline and diesel vehicles. Johnson moved in February 2020 to delay the deadline to 2035 in response to criticism from green organisations, including its own Committee on Climate Change, about the policy’s alignment with the UK’s 2050 net-zero aim. The deadline was again pushed back to coincide with the release of the UK’s 10-Point Plan for a Green Recovery from COVID-19 in late 2020.
The new regulations won’t prevent automakers from marketing used ICE vehicles. They only apply to cars; vans and motorcycles are not included. ICE-car-owning businesses and households will not be obliged to transition, but they will be encouraged to do so.
By 2030, many automakers, like Bentley, already intended to only sell pure electric and hybrid electric vehicles in the UK. Some people want the government to do more to assist companies in changing their manufacturing and design processes. One of them is the recently formed partnership between Fiat Chrysler and Peugeot Citroen.
Carlos Tavares, the company’s boss, stated during a news conference held to commemorate the occasion that the government needs to provide businesses with more clarity before they can decide how to proceed with their Ellesmere Port project.
“There is an issue at some point in time if you modify the rules, brutally, and if you restrict the rules for business,” he remarked.
Nissan eventually hands off its manufacturing business for battery cells.
Nissan intends to increase its focus on electrification, but it no longer wants to manufacture its own batteries.
It had a hard time selling off its battery manufacturing company, but they have now succeeded in doing so.
The Japanese manufacturer has reportedly been hunting for a buyer for Automotive Energy Supply Corporation (AESC), which makes battery cells for Nissan’s electric vehicles, for more than two years.
Just last month, the deal collapsed because GSR Capital allegedly couldn’t come up with the necessary funds, an estimated $1 billion.
Currently, Nissan claims that it has found a new buyer in the sustainable energy company Envision Group (Envision).
Nissan’s battery manufacturing facilities in Smyrna, Tennessee, and Sunderland, England, both owned by Nissan North America Inc. (NNA) and Nissan Motor Manufacturing (UK) Ltd. (NMUK), as well as its Japanese battery development and production engineering facilities in Oppama, Atsugi, and Zama, will be acquired by Envision.
Envision’s founder and CEO, Lei Zhang, commented on the news as follows:
“We are thrilled to announce the purchase of Nissan’s battery division, a market leader in the development of cutting-edge, secure, and dependable lithium-ion batteries. Envision will increase both companies’ footprints in the intelligent energy ecosystem through this relationship, working with the battery business management team and its highly experienced personnel to develop fresh, cutting-edge solutions for the IoT value chain. In order to realize the potential of IoT technology for smart transportation, V2G, and smart city solutions, we seek to extend our activities through investment into the new company through this strategic purchase and partnership.”
Nissan’s Chief Competitive Officer, Yasuhiro Yamauchi, stated that the company is still dedicated to producing electric vehicles despite the sale:
“We are happy to have reached a legally binding agreement with Envision, a top global provider of sustainable energy. Nissan will be able to focus on creating market-leading electric vehicles thanks to the deal, which is in accordance with the objectives outlined in our midterm plan, Nissan M.O.V.E. through 2022. We are certain that Envision will be a solid, long-term owner of the new business and that it will develop into a more competitive battery firm that will continue to grow.”
The decision was made because Nissan will switch from using its own AESC battery cells in the current Leaf to LG Chem batteries in the upcoming Leaf model.
AESC, which is also partially owned by NEC, surpassed Panasonic, Tesla’s battery cell supplier, to become one of the largest producers of electric vehicle batteries at some time in 2014. Since the joint venture started losing market share, Nissan has been very transparent about wanting to work with someone else to develop new EV programs.
Nissan is considering a powertrain update for the 2019 model that would incorporate a new 60 kWh battery pack with LG Chem cells, according to information that was leaked from a Nissan presentation earlier this year.
This is a wonderful example of how most manufacturers, with the exception of Tesla, are avoiding getting too engaged in the manufacturing of battery cells. Nissan was a pioneer in it, but it is now completely abandoning it.
Following the awarding of $48 billion in battery cell contracts, VW is just now considering starting its own battery cell manufacture for electric vehicles in 2025, as we just revealed.
One thing is certain: for automakers to survive, ensuring the supply of battery cells will be (and possibly already is) essential.
NAME OF THE PROJECT
In order to build one of the largest advanced battery manufacturing facilities in the country, an efficient and environmentally friendly paint plant, and to retool its Smyrna, Tennessee manufacturing facility for the assembly of the all-electric LEAF vehicle, Nissan North America received a $1.45 billion loan facility from the Department of Energy in January 2010. In addition, Nissan used the financing to build an assembly line for the LEAF’s electric powertrain at its engine production site in Decherd, Tennessee.