Nissan Out Of Battery Business, What’s Ahead For The Company And AESC?

3 months ago by Steven Loveday 35

New Nissan Leaf no camo

2018 Nissan Leaf without camo. Photo used with permission from Broom (3 more photos at source)

Nissan will sell off its battery venture, which is altogether too big for Nissan’s needs and can work to supply other automakers.

Nissan’s battery plant in Smyrna, Tennesse was built in 2010 for a whopping $1.4 billion (borrowed from the U.S. Department of Energy). The plant makes its own cells and has the capability to crank out about 200,000 EV battery packs per year. Although the automaker may sell this many EVs annually at some point (hopefully sooner rather than later), thus far this has never been the case.

Nissan

Original LEAF Battery Pack

The Smyrna plant is not the only facility run by the automaker’s battery venture, Automotive Energy Supply Corporation. The company also has a plant in Sunderland, England, as well as engineering and development centers in Oppama, Atsugi and Zama, Japan.

Nissan owns 51 percent of the entire operation, with 49 percent controlled by Japan’s NEC Corporation. The automaker will fully acquire the operation and then turn around and sell it to Chinese investment firm, GSR Capital. Brian Brockman, a Nissan North America spokesman, shared:

“This will enable GSR to grow its business and look for other opportunities. It will give them the scale to further develop their batteries and look for other opportunities.”

Nissan got into the business of building its own batteries a decade ago (~2007), quite simply because there was no other option to build cells on the scale the company was expecting at the time (anyone remember the optimism ahead of the initial debut of EVs?  It was incredibly over-done).

Today, with lots of capacity available in the wider market, the company isn’t focused on the supply-side of things so much, or even technology development it would seem;  but staying on top of the business by offering the best price…something players like LG Chem have shown to be much more proficient at with their decades of experience.

There are still few full-scale battery factories in the U.S. at this point. Aside from the Tesla Gigafactory, so GSR will be one of the largest scale producers of its kind in North America. Besides the Renault-Nissan Alliance, LG Chem also supplies many other automakers including Ford, GM, FCA and is currently in the process of expanding its Holland, Michigan battery factory.

Though reports are not official, the new 2018 LEAF is said to have a base range of about 150 miles via a 40 kWh battery, and a longer range option on top of that.  Reports are that Nissan USA will still be utilizing battery packs and some cell manufacturing capacity from the Smyrna facility for a time, which will then be owned and operated by an outside company on Nissan’s property. GSR will be able to use its remaining capacity to supply other automakers’ EVs.

Source: Automotive News

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35 responses to "Nissan Out Of Battery Business, What’s Ahead For The Company And AESC?"

  1. jim stack says:

    with the wilting battery that Nissan has had maybe it’s good they are going to others for a battery system. Cooling has been missing and I would welcome it.
    They have one of the best and efficient vehicles that is the best selling in the world. Only their battery life is a weakness.

    1. Mister G says:

      Thats right, my 2016 leaf sv lost third bar at 22k miles in central Florida

      1. Ian says:

        Ouch, driving Canadian winters my 2014 has full bars at 64000 km.

      2. Nick says:

        Looks like you’ve got a new battery coming your way! 🙂

        Both lucky and unlucky since you’ve got to suffer with a degraded pack until it degrades enough for a warranty replacement. Make sure you get the yearly battery checks done.

        1. William says:

          Yes on the continued annual Nissan dealership battery inspection/ report. Keeping that Nissan warranty active is mission critical.

      3. Knut Erik Ballestad says:

        Ooops..
        I have 110.000 km on 2013 Leaf, with no capacity loss at all.
        For once I am thankful for the cool Norwegian climate 🙂

        1. ModernMarvelFan says:

          “I have 110.000 km on 2013 Leaf, with no capacity loss at all.
          For once I am thankful for the cool Norwegian climate 🙂”

          Just wait until 150kM and it will drop like rock. Just like Steve Marsh’s 150K MILES LEAF that starts dropping quickly around 100K miles.

          But then again, he uses a lot of DCFC which you might not.

      4. JP White says:

        Thanks for that data point. So the new “Lizard” Batteries are not much better than the originals.

        THat tells me my new battery will not last much longer than the original.

    2. David Murray says:

      I’m sure the battery cells are fine. They just need to be properly cooled like every other EV does.

    3. SJC says:

      The NV200 has active air pack cooling, they can have an air cooled pack that does not degrade as much, they have to do it right.

  2. georgeS says:

    I’m surprised there’s still is no final word on whether or not the 60 kwh battery will be supplied by LG.

    1. Knut Erik Ballestad says:

      I cannot find the article now unfortunately, but I am quite sure i saw that AESC signed a licensing agreement with LG.
      This probably means that they can utilise LG’s technologies while still produce at their existing 3 factories instead of buying batteries from LG.

  3. John Ray says:

    “Nissan will be utilizing battery packs and some manufacturing capacity from its Smyrna facility, which will be owned and operated by an outside company on Nissan’s property.”

    Sounds a lot like what Tesla is doing.

    1. Alan says:

      Exactly, but what you don’t understand is, it’s only a good idea if Tesla does it apparently, according to the branch Tesladians on here anyway, because then it makes them production constrained by relying on someone supplying their batteries.

      Go figure !

    2. Nick says:

      That’s genius! By buying the equipment and build capacity so LG can have dedicated production just for them, they’ll be able to skip the supply pinch that all the other LG cell users are going to hit.

    3. Rob Stark says:

      For Starters, Tesla is using all of the cells from Panasonic’s GF operation, plus 99% of Panasonic’s 18650 Japan Production,plus they buy a little extra from Samsung.

      Tesla isn’t using ~10% of Panasonic’s Nevada production leaving Panasonic to market the other 90% to other automakers.

      Then there is the fact what the Chinese are buying is the whole factory, including the facilities to build the battery packs not just the cells.

      Good grief. These Nissan Fanbois.

      1. John Ray says:

        Nope. Still sounds like what Tesla is doing. If Nissan needs more cells, they will get more cells from right on their own property. If you are looking for some sort of differentiation, you haven’t found it.

        1. JP White says:

          Nissan did what Tesla did before Tesla did it.

          Now they are backing away from a good strategy to a weaker strategy. It’s like they are in reverse all of sudden.

          This isn’t the same as Tesla, it was the same as Tesla.

          1. John Ray says:

            So Tesla isn’t buying all their cells from Panasonic?

  4. JIMJFOX says:

    “a whopping $1.4 billion”
    Is this REALLY “whopping”? What does it cost to build a major battery plant, anyway?

    Maybe journalists have to come up with lurid descriptions as clickbait? I don’t know…

    1. Jay Cole says:

      …yes often past the title, and then the first paragraph of a story, when the second paragraph contains the word “whopping” it really draws in extra readers as “click bait”

      I’d explain further, but all our keyboards are being replaced with 24k gold ones – because we don’t know what to do with all the revenue from the implementation of shady tricks like the one you just discovered.

      Given how you have exposed us, and the secrets to success on the Internet, hopefully no one else will read this, start a competing website, and also start to use adjectives in their stories…because that is the only reason why we have had any success at all.

      1. Alan says:

        LOL !

        Out of interest, how does the 200K battery capability at $1.4b compare with what the Tesla gigafactory @ $5b & 500k batteries ? (Assuming that’s the number it will churn out ?)

        Can’t be a lot in it ?

        1. Jay Cole says:

          It’s really not a good idea to compare the two at all. Although separated by just 7 years of construction, the construction environment in ~2010 was quite a bit different than today…and Nissan already had the infrastructure/resources/land in place in TN.

          With that said, Nissan never actually built a plant ready to build ~200k batteries…they thought they were doing that when they started (it is why they did it in the first place), but they ultimately built a plant with the “capacity” to be easily tooled (relatively speaking) for ~200k, but only a ~fifth of that potential turned into reality.

          One has to remember that when Nissan broke ground on the plant in 2010, it (and all the other major OEMs) had sold exactly zero EVs, but GM (famous Lutz moment) was touting that 120k volts could be sold in a year, Nissan (as I recall) was more quietly saying something like 100k out of the gate.

          Anywhoo, initial LEAFs were supplied with batteries from Opama, Japan while the facility was under construction (which made the early LEAFs more than a little pricey for Nissan…and also slow to arrive).

          But less than a year after the groundbreaking (and sourcing still from Japan) it was painfully obvious early EVs were being priced too high/had too little range to satisfy the US consumer, and the original EV OEMs didn’t come anywhere close to these early optimistic expectations (with Fisker’s numbers being the most comical miss).

          At that point, Nissan well knew it had no need for all that capacity, and at that point it scaled back EV plans (goodbye Infiniti LE et al) until they could offer something far superior to the first gen LEAF to Americans.

          In the end, the factory, while built, was never tooled/staffed to build more than ~3,000 packs per month…a shadow of what the Gigafactory’s abilities are today.

          Sidenote: Nissan actually scaled back too far initially at Smyrna -something like ~20k/yr, and got hit with a little bit of an unexpected demand in 2013/2014 (month US stats here) when they brought US production online and reduced the price…took them a good ~7-9 months to bump production up to the ~30k+/yr level, which shows the lead time necessary to significantly change production capacities even when you have a factory in place.

          So what GSR is buying today isn’t a factory able to spit out ~17,000 LEAF-sized packs a month…it could of course, it is “~200k-capable” – the infrastructure, physical facility, plans, permits, etc. are in place, but a lot more investment is needed to make that a reality.

          1. Assaf says:

            Jay, following the numbers you cite (3k/year)…
            are you saying that ~10-20% of North American Leafs had their battery packs made in Smyrna, and the rest in Japan?

            1. Jay Cole says:

              Heeh, sorry some long post-itis/confusion there.

              Smryna was never in production for more than ~3k per month on the first gen offering, or about ~30k per annum. All the batteries for all NA LEAFs over the past 4 years are via Smyrna.

              One assumes that the current production capacity number may have changed/is being scaled up to some degree for the 2018 gen 2 LEAF (as it is obviously a superior offering in every way – range, pricing, etc)…but there is no hard data on that. However, I think one would imagine that Nissan would not have contracted GSR to build anymore than ~5k/month out of the gate given its experience in the segment.

      2. William says:

        The “Whopping” $1.4 million battery factory whopper, was told here first on IEV.

        Now, I am off to Burger King for a Whopper, thanks to Steven, Jim, Jay, and Alan. I will of course take my Leaf, with its battery made at the Tennessee “Whopper” factory!

        I like my BK Flame Broiled “Whoppers” well done, just like the way I like my Leaf 24 & 30 kWh “Lizzard” battery packs!

        Thermal Management is for Tofu Burgers!

        1. Jay Cole says:

          Thanks for you whopper-based click! Using the revenue skillfully gained from our word-play chicanery in this story, I am now going down to the Tesla store to pick up another Model X P100DL to enter in a local demolition derby this weekend. First price is a blue ribbon!

          1. Nick says:

            Bawahaha!

            Awesome Jay. 🙂

          2. William says:

            Well it’s good to see that your new 24k Gold keyboard is working fresh out of the Amazon box.

            After today’s DD podium Ribbon Ceremony, us ardent fans of yours, would appreciate that you proudly adorn your well worn Red Velvet smoking jacket, with your newest prize Blue Ribbon, in the style and placement of our other alternative Hero, “Captain Obvious”, as seen on TV! Thanks!

            1. William says:

              First “price” is a blue ribbon? Please, no second “price” for me!

  5. Don Zenga says:

    Nissan has 3 plants to make Leaf and probably 1 to make Zoe.

    Definitely they need a battery factory. I wonder why they sold, hope they acquire someone soon. Nissan has plans for electric crossover and they definitely need one.

  6. Warren says:

    “GM (famous Lutz moment) was touting that 120k volts could be sold in a year, Nissan (as I recall) was more quietly saying something like 100k out of the gate.”

    Wow! After six and a half years, nobody has done a third of that. It took four years for the entire industry to sell that many in a year, in the US. I guess Tesla will be the first to do it next year.

  7. Johnny Howell says:

    It doesn’t matter which vehicle you buy from them they will say anything to get you to sign the paperwork and then screw you anyway way they can even if you’re vehicle is still under warranty so just don’t buy from them

  8. Leafer says:

    Perhaps the new owners will see the wisdom and profit in offering an energy density upgraded battery for the 250,000 plus older MY Leafs.

  9. Pushmi-Pullyu says:

    “Nissan got into the business of building its own batteries a decade ago (~2007), quite simply because there was no other option to build cells on the scale the company was expecting at the time…”

    That’s right. And for the same reason, Tesla is building the much bigger Gigafactory 1, with plans to build cells — and BEVs — on an even bigger scale. It’s amazing how hard it is for all too many EV advocates to understand this.

    “Today, with lots of capacity available in the wider market, the company isn’t focused on the supply-side of things so much…”

    Well, if Nissan has no intention of expanding its PEV (Plug-in EV) offerings beyond the Leaf, whose sales peaked years ago, then it can certainly depend on being just one of LG Chem’s rapidly growing list of customers.

    But according to Elon Musk, it will take something on the order of 200 Gigafactories making batteries, to switch all ICEV production over to EVs. Relying on 3rd party battery makers to ramp up production as fast as EV makers are going to need them to, in the near future, seems like a rather dubious plan. Especially since Tesla was unable to get Panasonic to ramp up production as fast as it needed for the Models S and X.

    Tesla and BYD are now the only PEV makers to control their own battery supply. Tesla and BYD are also the only companies planning to rapidly ramp up production of PEVs in the near future.

    Coincidence? Some people seem to think so! I, for one, do not.

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