Report: Nissan To Sell AESC Lithium-Ion Joint Venture With NEC?

AUG 18 2016 BY MARK KANE 1

The making of a Nissan LEAF battery in Sunderland, UK

The making of a Nissan LEAF battery in Sunderland, UK

Nikkei reports that Nissan intends to withdraw from some of its lithium-ion cell battery manufacturing.

Several years ago, the Japanese carmaker established a joint venture with NEC (electrode supplier) – the Automotive Energy Supply Corp. (AESC), holding a 51% share.

Besides the first production facility in Japan and later in the US (Smyrna, TN), Nissan also built a facility in the UK (and recently announced production of next-generation batteries there).

However, there is no doubt that Nissan EV sales are far below initial expectations, and AESC battery costs could well be too high compared to external suppliers. With those potential factors in mind, rumors about Nissan selling AESC are not without credibility.

“Nissan is looking to sell its 51% stake in Automotive Energy Supply, the manufacturing joint venture owned by the automaker and Japan’s NEC. Nissan determined it will save money by switching to external suppliers, sources say.”

One thing we have to question with this report, is who exactly Nissan could sell AESC to if they couldn’t make it work, and why would they think they could?  We have seen other OEMs try to sell their battery making projects (Daimler), and ask huge amounts…only to receive a $1 bid (perhaps in jest by LG).

Separately NEC also could withdraw from AESC and focus on its battery electrodes company.

Whether Nissan really will sell AESC after announcing next-generation cells remain a question, especially since there are players that intends to enter vertical integration (Tesla Motors – Gigafactory, Volkswagen plans, BYD already produces both batteries and cars).  What might actually be happening (and thus this reports getting confused) is that Nissan is looking to hedge bets, and give away some of its battery business (sub-contract to other players, like LG) in certain regions – such as in Europe.

source: Nikkei

Categories: Nissan

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1 Comment on "Report: Nissan To Sell AESC Lithium-Ion Joint Venture With NEC?"

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I’ve repeatedly praised Nissan for building its own battery production, which was necessary for getting past the bottleneck of battery supply which limited Leaf production in its early years.

If Nissan is going to abandon its advantage and start depending on third-party suppliers for battery packs just as PEV sales finally appear to be entering, or at least approaching, a sustained exponential growth phase…

Well, that’s the sort of decision that in the past has caused legacy market leaders to be driven into bankruptcy during a disruptive tech revolution. For Nissan’s sake, I hope they don’t go through with the sale.

It might make sense for Nissan to mothball one or even two of their battery factories, until they develop and start selling a better BEV; one that can compete with the Bolt and the Model ≡. But actually selling off AESC in its entirety? Talk about shooting yourself in the foot!