Nissan’s Battery Factories In U.S. And UK To Remain Open

3 years ago by Eric Loveday 15

Nissan's Plant In Smyrna Tennessee

Nissan’s Plant In Smyrna Tennessee

Nissan LEAF at Sunderland, UK Factory

Nissan LEAF at Sunderland, UK Factory

Despite reports to the contrary, it seems Nissan will attempt to keep both its U.S. and UK battery factories operational, even if LG Chem displaces Nissan’s in-house battery operations.

When the news initially broke, we had suggested that bringing LG Chem on board didn’t necessarily imply that Nissan would shutter those two battery factories completely, but that battery production would become more of a partnership:

“Speculatively, we think that LG Chem could supply Nissan with core battery components, which will then be assembled into finished battery packs at Nissan’s 3 battery factories (Japan, UK and U.S.)”

But now MarketWatch adds the following:

“Nissan Motor Co. and Renault SA are looking for ways to reduce battery costs and share more components between electric vehicles, but they don’t plan to shutter battery factories in the U.S. and U.K.”

“The companies, which share partial ownership and technology, frequently review their battery procurement efforts as part of the effort to reduce costs on the electric Nissan Leaf and the Renault Zoe, a company official said. The review, however, doesn’t contemplate reducing employment or production at battery factories in the U.S. or the United Kingdom, the company said, responding to a report by Reuters Monday.”

“The company official said that shuttering the plant isn’t a consideration and wouldn’t even be feasible under the terms of the [U.S. government] loan agreement.”

So, it would seem that the earlier speculation is spot on.  Even if Nissan turns to LG Chem, the battery factories in the U.S. and UK will still be tasked with the duties of assembling battery packs and it’s even possible that LG Chem could move some of its cell-manufacturing operations into those two Nissan facilities.

  • No lost jobs
  • No shuttering of Nissan battery factories
  • Lower battery costs
  • Better performance from LG Chem cells

It seems like wins all around on this potential Nissan-LG Chem battery tie-up.

Source: Market Watch

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15 responses to "Nissan’s Battery Factories In U.S. And UK To Remain Open"

  1. GeorgeS says:

    This is a good thing.

    Obviously it means the Holland plant will have less to do but…

    I’m still hopeful that there will be enough work to increase Holland production beyond the little 40 person expansion they just announced.

  2. Tftf says:

    It it works out like this, the loser will be NEC.

    (So far, Nissan a joint-venture called AESC with NEC while Renault got their batteries from LG).

    It looks like all stays the same but LG gets the entire contract from Nissan-Renault.

    1. Rob Stark says:

      Reminds me of Elon in Japan saying the heart of Model S is Japanese.

      The heart of LEAF will be Korean.

      1. Tftf says:

        Well, if the numbers don’t work out national alliances don’t matter.

        It looks like LG provides better packs cheaper or sooner, here are some additional quotes from Ghosn:

        http://europe.autonews.com/article/20140925/ANE/140929945/renault-nissan-rethinks-ev-battery-strategy

        LG reiterated many times that they can provide batteries for mass-market EVs with180-200 miles of range by around 2016-2017.

  3. DaveMart says:

    How much this is a good thing depends on whether having to keep open those facilities compromises efficiency, if at all.

    We are constantly told that a Gigafactory centralising all production is the only way to go to reduce costs, and this clearly goes in directly the opposite direction.

    I have always been dubious of the idea that centralised production necessarily is the right answer, as in the real world a host of factors come into play, so that the balance fluctuates.

    If that were not so we would already be producing all the world’s 80 million cars or so in one giant factory, as it has had a hundred years to shake out.

    But we will see how the two different models of distributed and centralised production work out.

    Or maybe not, as if Tesla intend to sell any substantial number of cars in China I can’t see them giving them the breaks they need without a substantial part of their production taking place in China.

    A couple or so Mini-giga-factories, perhaps?

    1. Murrysville EV says:

      It makes sense to localize production of the heaviest part of a product, to save on transportation costs.

      Part of the Gigafactory’s magic comes from recycling old batteries, so in that sense it has economies of scale. Also, it eliminates the overhead costs built into every Panasonic cell Tesla has bought to date.

      Accordingly, I can see Tesla building several Gigafactories – as you suggest – to maximize economies of scale, and reduce shipping costs for 1000+ lb battery packs.

      1. DaveMart says:

        They might end up as gigafactories, but in practise is my surmise is correct and China will not give breaks to cars which are substantially produced outside of China, then production will need to be split early on, and what will happen is regular factories of 7Gw or so capacity.

        IOW the idea of the GF is of centralised production.

        If that can’t be made to work then they end up with the same model as LG, whatever fancy name they call it.

        1. Rob Stark says:

          Shanghai is already given incentives to buy Teslas.

          Elon Musk is confident once they meet Chinese specific technical requirements they will qualify for the Chinese national incentives.

          Nissan seems to be replacing suppliers from NEC to LG Chem.But will still assemble batteries as before at their own plants.

          Gigafactory works because entire production is shipped to relatively local Fremont plant. Saving on shipping by having all suppliers on one building can only help by reducing shipping cost.

          I fully expect once Tesla builds a Chinese auto factory they will also produce a GF in the 35 GW range and keep the Northern Nevada GF working at or near full capacity.

          I highly doubt many 7 GW range battery factories.

          1. ydnas7 says:

            NEC cathode production facility was 10 gigawatt

            so yes, a gigafactory

    2. Lensman says:

      One size does not fit all. We can see, historically, that concentrating industries in the Harper’s Ferry and Rouge River areas were beneficial to the industries there. That doesn’t necessarily mean that building a single factory to build as many li-ion battery cells as the entire current worldwide output today, makes sense. But putting the factory in close to a lithium mine, and with a direct rail connection to its principle “customer”– the Tesla Fremont plant– certainly would be two good reasons to locate the GigaFactory where it is.

      Whether or not LG Chem and other battery makers will be able to match the advantages of a GigaFactory without actually building factories of equal size… remains to be seen.

      In fact, there are an awful lot of chickens being counted here before they are hatched. The GigaFactory has not yet even been fully funded for construction, let alone has it produced any batteries.

      It’s going to be interesting to watch what happens in the field of BEV battery and car manufacturing over the next few years. One thing is certain: There will be some surprises in store!

  4. 2EVnogasdriver says:

    With autopilot on, all the rolling chassis can drive themselves to Freemont, and piggy back a few batteries on top.

  5. ydnas7 says:

    there are multiple possibilities not speculated upon

    ie,
    Nissan continues to use AESC for BEV, but uses LG cells for PHEV…..

    or

    Nissan assembles LG cells into Infiniti battery packs at a Nissan plant, and continues to manufacture NEC/AESC cells and assemble them into packs at the same facility for lower price Nissan.

    1. Lensman says:

      I agree, I don’t think this is the final word. Just because Nissan is planning to keep the battery factories running doesn’t mean they are going to use them for their full production.

      In fact, one quote in the article suggests they would have severe penalties for closing the U.S. battery plant– I presume the contract requires payback of a lot of U.S. stimulus money if the plant is closed. In that scenario, it might make financial sense to buy the cells, or at least most of the components for the cells, from LG Chem, then assemble the packs in the Tennessee and Sunderland plants.

    2. scottf200 says:

      Maybe they will need to keep making the “lizard” batteries to cover warranty work as well for face another lawsuit.

  6. Spec9 says:

    Release that Infiniti LE with the much larger battery pack. If you can sell it for a decent price, you could have a hit.