The race for batteries is very real for car manufacturers. Supplies are limited and will continue to be limited for years to come as you cannot open new mines and refining facilities with large doses of wishful thinking. It takes years to start a new mine, which means manufacturers have to think years ahead.
But, as I’ve pointed out before, Japanese automakers are in a tough spot when it comes to relying on rare earth minerals and battery minerals that largely come from China. This context is important to understand, as the Japanese government has realized that it will need to be more proactive in developing its own clean energy technology and be more competitive in other areas if it hopes to keep up with China. According Quartz, China’s grip on minerals that not only boost clean technology but also a variety of other crucial things like medical imaging came to a head for Japan in 2010 after a territorial dispute. By cutting off supplies, China was able to bring Japan to its knees. This could explain why Japanese automakers are sticking with hydrogen technology while the rest of the world is opting for battery electric vehicles (BEVs).
Besides the geopolitical issues at play, there is the US response in the latest iteration of electric vehicle subsidies. For an electric vehicle battery to qualify for tax credits and rebates in coming years, it will have to come from minerals from countries other than China, a country the US government is increasingly wary of. . This could lead to more plug-in hybrid vehicles (PHEVs) on the road, but the exact number of credit-eligible BEVs that can be built largely depends on whether or not sufficient battery supplies are available from friendly nations.
We have seen other Japanese companies, in particular Toyota, take a very cautious approach to electric vehicles. An interview at CarBuzz with a Toyota executive shows us their way of thinking, and it goes beyond issues of procurement and geopolitics. They are committed to electrification, but they are not committed to going all out with BEVs (or “pure EVs”). They are going to focus on the technology that they believe best fits the customer’s needs, including PHEV and hydrogen. Toyota offers a wide range of cars to appeal to different markets. Toyota should be able to maintain the changes required in each sector by offering variety and diversity in its products.
Honda has, until very recently, followed a similar trajectory. I called them idiots at least once because they didn’t take electric vehicles seriously, just like Toyota. More recently the company seems to have realized that the US market was going to get heavy for EVs and partnered with GM to get back on track, but it still doesn’t offer much and its own non-GM offerings are still years away. , and that’s just a promise.
At the same time, though, we’ve seen Nissan be a bit of a pioneer in BEVs, even if they’re in an environment that doesn’t favor them. Nissan beat Tesla to market with an electric sedan (the first-generation LEAF beat the Model S to market) and offered it at a much more affordable price, even though it had much less range, among other things. . So gauging where exactly Nissan stands on electrification can be tricky, as it’s not afraid to step out of the pack sometimes on EVs.
New minerals deal offers some clues
I can’t predict for sure whether Nissan will take quality electric vehicles seriously in the future, but we can look for clues about their long-term thinking. As I mentioned above, you make deals on battery supplies (and battery minerals) years in advance or go without.
Nissan revealed in a press release that it has entered into a definitive agreement to acquire shares of Vehicle Energy Japan Inc. (VELI), a company involved in the automotive lithium-ion battery business. Upon completion of regulatory procedures, including necessary approvals and clearances, Nissan will purchase the shares.
Nissan will acquire all of Vehicle Energy Japan’s common stock and subscribe for the company’s common stock. Following the merger, Vehicle Energy Japan will become a subsidiary of Nissan and will share ownership with existing shareholders Maxell, Ltd. and Hitachi Astemo, Ltd.
Nissan tells us that Vehicle Energy Japan has an integrated battery supply chain from cells to packs, as well as sophisticated battery management systems. It develops, produces and sells lithium-ion batteries, modular batteries and battery management systems for electric vehicles in the future market.
Nissan also revealed the strategic importance of this purchase. Nissan says in its long-term vision, Nissan Ambition 2030, that it aims to create significant value beyond mobility by placing electrification at the heart of its business strategy and expanding opportunities for travel and society. . Vehicle Energy Japan will be a key part of Nissan’s plans to further electrify its lineup as a major Nissan supplier. The investment will enable Nissan to secure a reliable battery supplier and help advance next-generation batteries with a competitive edge in performance and cost as part of the vision. Vehicle Energy Japan will provide a constant supply of batteries to Nissan, as well as other customers, thanks to Maxell, Hitachi Astemo and continued support from Nissan.
What it can and cannot tell us
By taking control of more future batteries, we can see that Nissan seems serious about future EV models beyond the LEAF and Ariya, which is good news. But what we can’t learn from this deal is how much of the market they expect to be electric in 2030, and how much of that market they want to be the manufacturer.
In other words, stocking up is one thing, but getting enough supplies to make most or all of its BEV vehicles (as opposed to PHEV or hydrogen) is another matter altogether.
I hope this is a sign of more to come. But, if we’ve learned anything from the last decade of electric vehicle development, it’s not to make too many assumptions about what will happen in the industry, as it often changes rapidly.
Featured image courtesy of Nissan.
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