Nissan CEO Missteps In China: Says Venucia e30, EVs Need More Incentives To Sell

APR 23 2015 BY JAY COLE 29

It has been no secret that the launch of electric vehicles in China was a bit of a disappointment.

Nissan Had Expected To Sell 50,000 e30s A Year Within 3 Years (Photo: InsideEVs From Auto China)

Nissan Had Expected To Sell 50,000 e30s A Year Within 3 Years (Photo: InsideEVs From Auto China)

When mass produced EVs were first coming to market in the first part of this decade, it was assumed that China would be one of the hotbeds of acceptance for the technology.

At the time, China was (and still is) dealing with some serious emissions concerns in densely populated cities, and the government was talking a big game when it came to progressing electric technology.

As it turned out, when electric cars did became available, the Chinese government seemed to be dragging its feet, effectively working against adoption of plug-ins by being slow to act.

However, much has changed since then – at least for many EV makers in the country.  But not so much for Nissan.

Which brings us to this past week at the Shanghai Auto Show, where we find Nissan CEO Carlos Ghosn weighing in on the electric vehicle situation in China.  Mr. Ghosn stated that he was disappointed with EV sales in the region so far, and that government needs to take more action in the county.

Nissan, along with partner Dongfeng, spent $785 million to both make and sell the LEAF-cloned, Venucia e30 (also known as the “Morning Wind) in China; one of the few global automotive titans to make such a commitment.

Citing undue hardships in the market, the Nissan boss (as reported by Automotive News) says the company isn’t going to introduce any new models until the climate changes.

“The question we are all a little bit worried about is the fact that electric cars are not taking off in China, while in other markets they are taking off.  The consumer’s not buying.”

Locally Made, Venucia e30/Morning Wind Went On Sale In China In September

Locally Made, Venucia e30/Morning Wind Went On Sale In China In September

The Venucia e30 EV first went into production in September of 2014 for RMB 267,800 ($43,200 USD).

Nationally, EVs made locally are eligible for rebates up to RMB 57,000 ($9,300), bringing the net cost of the Venucia e30 down to RMB 210,800 ($34,030 USD).  Even with the rebates, this is not a great deal considering that a similar stripped down Nissan LEAF in California would probably cost about $17,000 after incentives.

“I don’t think we’re going to bring a second car and a third car. Today the challenge is sell this one.  The main challenge today is really to encourage, put more incentives, in order for the consumer to buy in. Before adding more cars and bringing more technology, we just need to make sure we can sell the technology we already put into the ground.” says Mr. Ghosn, reported by the Automotive News.

“I think it will happen,” the CEO said in regards to future EV sales in China, “But it will need probably more concerted action between government, local governments and car manufacturers.”

Venucia e30/Morning Wind's Interior Looks Strangely Familar

Venucia e30/Morning Wind’s Interior Looks Strangely Familar

Rare is the day we disagree with the Nissan CEO when it comes to electric vehicles, as Nissan is the undisputed worldwide leader in the segment.

In this case, the onus (and the e30’s failure to sell) can only be put himself for introducing the LEAF brand in China at that price-point, over creating a product specifically tailored for the region.

The thing is, after an unquestionably slow start in China, plug-in vehicle sales are now on fire.  The Venucia e30 is just not participating in the revolution.

According to CAAM (China Association of Automobile Manufacturers) a total of 14,122 plug-in vehicles where sold just last month (9,390 BEVs, 4,732 PHEVs) – that is almost 10% better than any month in history for the US.

For the year to date, 26,581 plug-ins have been sold in China, that is up 280% from a year ago, and 14% more than have been sold through the first three months in the United States so far.

How many Venucia e30 “Morning Wind”s have been sold during China’s hot start this year?  Just 218.

In contrast, the segment leader in China is the BYD Qin (PHEV from RMB 189,000 pre-incentives) with over 6,300 sales so far, followed by the BAIC E-Series (BEV) with just under 2,000 units sold.

Put another way, Nissan-Dongfeng has a market share of .8%, or only one Venucia e30 is sold for every 122 EVs moved in China.  In the US to date, the Nissan LEAF has claimed almost 1 in every 4 EV sales.

Perhaps its time for Nissan to look in the mirror for problems as to why the e30s hasn’t sold well, rather than the Chinese government.

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29 Comments on "Nissan CEO Missteps In China: Says Venucia e30, EVs Need More Incentives To Sell"

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“the company isn’t going to introduce any new models until the climate changes.”
hmmm..

By then it will be too late! Isn’t the whole idea of cleaning up transportation in order to prevent climate change? 😉

Yeah, Ghosn *WANTS* Climate Change? No way!!! 😉

No, the “idea” is to wean ourselves off the addiction to burning irreplaceable fossil fuels for everyday energy, and to significantly reduce the health hazards from air pollution from gasoline and diesel exhaust fumes.

Climate change is mostly natural and ongoing. It’s part of Human evolution; it helped make us the dominant species on this planet. Humans are much more adaptable than most species are; that’s why we can and do live all over the Earth. The attempts to somehow stop a natural part of our world from happening are not merely fruitless and wasteful of resources, time, and energy; they’re downright crazy.

EV advocates should stick to environmental issue that all reasonable people can agree on, such as reducing pollution and resource depletion. We shouldn’t get into politically divisive arguments over how much or how little climate change really matters, or how much or how little of it is caused by human activity.

“EV advocates should stick to environmental issue that all reasonable people can agree on”

So the 97% of scientists that agree that we are causing irreversible damage to our climate aren’t good enough? If 97% isn’t good enough for you, then there is probably just about NOTHING that “all” reasonable people agree on.

I do generally stick to other less controversial topics (note: climate change is not really controversial in the scientific community although for some reason it is in the general community). But Ghosn’s double-entendre was too good to pass up.

Brian said: “So the 97% of scientists that agree that we are causing irreversible damage to our climate aren’t good enough?” Do you even know what the word “climate” means? You can’t “damage” climate any more than you can “damage” the weather. It’s a complete non-sequitur. The real problems we face with the environment, right now as well as in the future, are significant overpopulation and rapid resource depletion… the first being the major cause of the second. For example, in California right now the water table is getting so low that soon they’ll run short on drinking water. You can certainly argue that the problem has been exacerbated by the current drought, and perhaps that has been caused or worsened by climate change, but the -real- problem is California agriculture using up groundwater to grow water-hungry crops in very arid, near desert areas. Another example of overpopulation resultant from overpopulation is the current civil unrest in the Mideast. The price of food doubled — that’s right, doubled — shortly before the “Arab spring” uprisings began. Growing resource shortages, including shortages of food and drinking water, are real, serious problems… as opposed to tiny variations in global temperature that for… Read more »

LOL! Way to nit-pick the wording of my comment. I do that all the time, so I guess it’s about time it came back around to me.

When I referred to damaging our climate, I was using a sort of short hand. I’m referring to the idea that we are changing it to the point that it can no longer support us. But I’m pretty sure you understood that much.

As for resource depletion and (regional) overpopulation, I agree. I don’t know if globally we are really nearing the population capacity of the Earth. Maybe we are, maybe we aren’t. I don’t wish to debate that, although I’ll listen if you have strong feelings.

So like I said, when talking with people, I prefer to meet them where they are. There are many excellent reasons to consider purchasing an EV, and resource depletion is one of the top.

And once again, I was simply enjoying Ghosn’s unintended implication that he WANTED the climate to change.

From the Googles: Climate is a measure of the average pattern of variation in temperature, humidity, atmospheric pressure, wind, precipitation, atmospheric particle count and other meteorological variables in a given region over long periods of time.

I would argue that humans absolutely can damage the climate by the accepted definition of the term. Our activities can affect the average patterns of all of the above, and arguably, already has.

Blah blah blah, You are defending big oil Lensman. .. Again…

The climate on Venus is very natural. How does it being natural make it a good thing?

My species did not evolve on Venus. Did yours? 😉

the realty is BYD has great models compared to us.the crap that has little batt.like a leaf(i have one by the way).we need at least 40 kw batt to make a great car,not 7 kw not 14 kw not 18k,not 22,not 24 ,not 27, 40 kw in a BEV. 18 kw and more in a PHEV !lets get with realty .

Can you qualify which vehicles are sold in China – giving a breakdown of what is cauing this “plug-in vehicle sales are now on fire”. Aren’t many of them China-built brands which infer that they have a local incentive in place for buying non-imported vehicles?

I think Nissan has the same issue as Tesla in thinking that an import will sell substantially well against local brands in the country (similar issue in Germany).

Found my answer – very heavy China brand sales:

http://ev-sales.blogspot.com/2015/04/china-march-2015.html

Yup. Heavy resistance to foreign imports has been a part of Chinese culture far longer than the Communist government has been around. (Read up on what lead to the Opium Wars, if you don’t already know.)

The Chinese central government recently mandated that at least 30% of all government passenger vehicle purchases had to be alternative-fuel vehicles, but you can be sure the Chinese government is buying few if any plug-in EV imports for government fleet car use.

Meanwhile, the lack of reserved parking places for the average Chinese citizen, and the excessive amount of red tape obstacles to Chinese citizens getting an EV charger installed in a public parking lot near where they live, continue to be a strong barrier to plug-in EV adoption there.

Regarding Germany at least, according to EV sales blog, Nissan sold last quarter in Germany about as many Leafs as BMW sold I3’s. Tesla sales are quite good as well over there. So no German nationalistic bia it seems. Regarding the Chinese, I believe the environement concern is not as developed as in the US or Europe where individuals will buy an EV as a pro environment statement . Moreover as per many comments I read, many US citizens resent the death of many young US soldiers during the Gulf war (to keep oil flowing). That is an incentive to buy EV’s not shared by the Chinese. Finally, way I see things in China, people will buy a car either because it is cheap or because of its value as a status symbol. None of those 2 aspects with a Nissan leaf I am afraid.

So, no long wheebase version of the Leaf with “Executive” style rear seating? 😉

Seems Tesla has learned and adapted to the Chinese Market’s demands and Nissan has not…

Tesla is having very much the same problems with selling cars in China that Ghosn is talking about.

I’ve seen suggestions online that Tesla -should- offer a variation on the Model S with more room in the rear seat, for the rich Chinese who get driven around by chauffeurs, but certainly no indication from Tesla that it intends to do so.

With the exception of what we’d call NEVs, I rather doubt consumers are buying any electric cars in China. The BYD sales are probably to come government agency, and the sales were probably paved with a bribe.

These cars are expensive and the grid is China is dicey. Not a welcoming environment.

I do, however, think people are buying NEVs in the rural areas. They’re cheap, gas is expensive, and roads don’t allow for fast speeds anyway.

FWIW China has thrown tons more money at electric vehicles than any other country. Tons more. It simply hasn’t worked, in part because local rivalries have crippled it and in part because Chinese companies haven’t been able to deliver good product.

The price is probably the biggest issue. At 210,800 RMB after incentives, it’s almost twice the cost of the Tiida (China’s Versa Note) at 116k RMB.
http://tiida.dongfeng-nissan.com.cn/

In the US, even with only the federal $7.5k incentive, that brings the Leaf price down from $29k to $21.5k. The Versa Note starts at $17k, so the difference is about a 25% more, which is acceptable given gas savings (state incentives help a lot too).

As for the competition in China, probably only the Qin at 189,800 RMB before incentives is selling a lot to consumers. The BAIC E-series (249,800 RMB before incentives, 25.6kWh battery) is used a lot as a taxi and is only slightly better than the Venucia.

I forgot to mention that the BAIC E-series is a Mercedes B-Class clone, so that probably helps it a bit too.

Really? We’re still comparing the Leaf to the Versa? They aren’t even the same class of car (Versa is a compact, Leaf is midsized). The driving characteristics of a Leaf are far more refined than those of a Versa. Other than being 4-door hatchbacks made by Nissan, the two have very little in common.

The Versa Note is the closest thing Nissan makes, and I figure the size/equipment difference is balanced by the range disadvantage of the Leaf.

Even if you use the Altima for comparison, that’s $22k, so the US price for the Leaf after incentives slightly undercuts it in price.

The China equivalent to the Altima is the Teana, which starts at 178k RMB. So the Leaf after incentives is still 35k RMB (~$5.6k USD) more.

http://www.carnewschina.com/2013/03/19/new-nissan-teana-hits-the-chinese-auto-market/

I think due to Chinese conservatism, even with incentives they will much prefer plug in hybrids.
And local brands will get much more incentives in any case. So, good news for BYD and maybe Audi, BMW. Not for Tesla or Nissan.
Also to keep in mind – Chinese don’t like Japanese cars.

daniel said:

“Also to keep in mind – Chinese don’t like Japanese cars.”

I think it’s more basic than that. Historically, China and Japan have been enemies for centuries; the Japanese invasion of Manchuria is the most recent major flare-up. I don’t think the enmity has gone away, either; note the current rather tense situation with territorial disputes over islands in the region.

Hardly a surprise if most Chinese don’t want to buy anything made in Japan.

I think Ghosn is probably overstating his case, but clearly China is a tough market for foreigners. Japanese cars have been under pressure from nationalism due to the islands dispute, plus of course procurement rules favor local companies. It’s not a level playing field. It’s not even a field, more like a set of terraces.

That said, is the Venucia really the best they can do? As others noted, the price/value ratio is well inferior to the Leaf in the US. How can that happen in China, where labor is cheaper than in Japan or the US? Not sure what is going on here, but if Ghosn wants to gift the Chinese market to BYD, there must be a reason.

So don’t tell me no one realized ‘climate changes’ mean political climate and that the phrase was tongue-in-cheek?