Nissan’s [JPX:7201] share price is kicking slowly back into gear following the company’s launch of its $18bn Nissan Ambition 2030 plan to revive the manufacture of electric vehicles (EVs).
On 29 November the Japanese carmaker said that over the next five years it would launch 23 new electrified models, including 15 EVs, and aim for a 50% electrification mix by 2030. It also plans to introduce all solid-state battery (ASSB) vehicles by 2028, which promise a greater range for drivers and lower charging times, and to open a pilot plant in Yokohama as early as 2024.
Nissan expects ASSB technology to bring the cost of battery packs down to $75 per kWh by fiscal year 2028. The aim is to bring costs down further to $65 per kWh to achieve cost parity between EV and petrol and diesel vehicles. It also intends to increase its global battery production capacity to 52 GWh by fiscal year 2026, and 130 GWh by fiscal year 2030.
Nissan said it intends to increase its electrification sales mix across major markets by 2026, including Europe by more than 75% of sales; Japan by more than 55% of sales; and China by more than 40% of sales. In the US it wants a 40% increase of sales mix by 2030.
Nissan's target for reaching carbon neutral
The plan will also help Nissan meet its goal of being carbon neutral across the life cycle of its products by 2050.
Nissan CEO Makoto Uchida said: “The role of companies to address societal needs is increasingly heightened. With Nissan Ambition 2030, we will drive the new age of electrification, advance technologies to reduce carbon footprint and pursue new business opportunities.”
Share Price Reaction
Nissan’s share price initially reversed from JPY593.5 at the close on 29 November to JPY542 at the close on 2 December as investors appeared unimpressed by the move. But it had partly revived to close at JPY569 on 8 December.
Nissan has a strong history when it comes to EV manufacturing. Its Nissan Leaf was the first EV to enjoy mainstream success when launched in 2010. In the UK, according to SMMT figures, the Leaf was the fourth most popular electric car in the UK this year, beaten only by the Tesla [TSLA] Model 3, Kia Niro and Volkswagen [VOW] ID.3.
However, the Renault-Nissan-Mitsubishi Alliance set up in 1999 was placed only ninth when it came to the global plug-in vehicle market share in the first half of this year. Tesla, VW and GM comprised the top three.
Nissan’s share price has been held back in recent years as the company has seen its rivals race past it in the EV field – in brand recognition, investment and battery technology. General Motors [GM], for example, along with Ford, has pledged to phase out fossil fuel vehicles by 2040, with Volvo [VOLCAR] planning to be a fully electric car company by 2030.
Nissan’s $18bn plan is, in fact, twice as much as it has spent on EVs in the past decade.
Nissan’s focus has been elsewhere recently as it continues to deal with the fallout from the exploits of its former chairman Carlos Ghosn.
In 2018 Ghosn was arrested over allegations of financial misconduct at the company – understating his compensation and misusing Nissan cash for personal gain. However, before his trial began, Ghosn, who was under house arrest at his Tokyo apartment, managed to escape on a private plane to Istanbul, hidden in a box. He turned up in his childhood home of Lebanon, a country that does not have an extradition treaty with Japan. Ghosn denies the charges.
Since Ghosn’s arrest, Nissan’s share price has more than halved. Fears were the company had lost its way and drive to perform in the face of the Japanese government’s commitment to end manufacturing of petrol and diesel cars by the mid-2030s. Nissan’s return to EVs suggests the company is past the management disruption and back on track. The company’s share price also seems to be fighting back.
According to MarketScreener, analysts remain cautious with a consensus having a Hold rating on the stock and a JPY714 target price.
“a significant breakthrough from Nissan still seems unlikely. The technology is notoriously tough to build at automotive scale” - Stephen Wilmot, per WSJ
Stephen Wilmot, writing in the Wall Street Journal, believes that Nissan’s focus on ASSBs could help it make up lost ground in EV technology, but “a significant breakthrough from Nissan still seems unlikely. The technology is notoriously tough to build at automotive scale.”
Nissan has a hard road ahead, but at least it is going in the right direction.
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