## Report: Nissan, NEC to Invest $1.1B or More to Increase Li-ion Supply for EVs and HEVs ##### 28 December 2008 The Nikkei reports that Nissan Motor Co. and NEC Corp. will invest ¥100 billion (US$1.1 billion) or more in their joint venture Automotive Energy Supply Corp. (AESC, earlier post) to boost manufacturing capacity of lithium-ion batteries to supply a total of around 200,000 electric and hybrid vehicles per year by 2011 or later.

Initial annual battery output from the AESC plant in Kanagawa Prefecture is set to supply packs for approximately 13,000 vehicles.

The plant was to expand its output capacity to 65,000 vehicles by 2011, but the parents have decided to bring this forward to 2010. In addition, they now intend to build an additional factory in Japan in 2011 or later.

Furthermore, the two firms are considering setting up factories in the US and Europe to supply local automakers. These foreign factories may tap low-interest loans offered by their respective governments for the production of environmentally friendly vehicles.

Very good news.

Fifteen to twenty more investments like this one (or larger) and the world may have mass produced affordable high performance battery packs within a few years.

What kind of investments are USA's Big-3 car and car part firms doing (or have done) to mass produce affordable battery packs? Is a drastic change in their management and development philosophy overdue?

Major changes are required to transition from current ICE dinosaurs to common sense affordable HEVs, PHEVs, BEVs electrified vehicles.

It is doubtful that all the managers and employees in place can do it. Acquired resistance to change may be insurmountable for many of them. Are new factories with new managers and employees required? If so, it may be advantageous to let bankruptcy follow its normal course.

"to supply a total of around 200,000 electric and hybrid vehicles per year by 2011 or later."

Unless we believe the Japanese have lost their ability to read and react to market trends - this is a highly significant statement. Two hundred thousand EV/HEVs by 2011 is a LOT of EVs! And that's just Japan. Not including US, Europe, China, India and SA.

Don't know about you guys but that looks mighty positive for a first year product rollout. Call it "unconscious optimism" - but it sure looks good.

I have to agree with Reel. 200,000 is probably on the high side for 2011. Their "out" is the "2011 or later". To hit those kind of numbers, they would have to be manufacturing these cars now.

Note the collaboration with NEC,
This is where the difference appears to be in the approach.
The Chinese battery maker/ aquires interest in autos, There are various Asian collaborations at high level wheras the American companies seem more interested in in house development, presumably because they dont have as large an export (electronics/ IT) market.
There is also a tradition of large Asian co's having diverse arms that while autonomous have the established relationships know how.
This is the equivalent to say GM-Hewlett packard Ford - IBM.

No its not saying that at all.

Its saying they will make around 200k units. Not ev packs. It likely takes 10-20 units to make one ev compared to just 1 to make a hybrid pack.
So depending on what happens they will make around 200k cars with packs in them. A few will be ev most hev.

It clearly says

"boost manufacturing capacity of lithium-ion batteries to supply a total of around 200,000 electric and hybrid VEHICLES PER YEAR"

Who would even try and guess at the ratio of BEV to HEV???

Nissan's plans to date have almost exclusivley been for BEVs and their announced goal is early market domination of this new sector.

Looks like the Japanese again have the forsight to invest early to dominate a new technology sector. (eg Plasma TVs) This announcement joins a new \$170M EV Li-ion batt joint venture announced earlier this month between Honda and GS Yuasa, the same company who set up a JV with Mitsubishi exactley a year ago for their MiEV supply.

The point is some here were saying ooo 200k evs.. thats not possible from this stage as that would be a huge number of cells more then this announcement is indicating.

Producing enough battery packs for a mix of 200 000 HEV-PHEV-BEV a year is not such a challenge for major players.

Mass production could easily ramp up to 1 000 000 packs a year faster than we think.

Nissan says their EV will cost about same as conventional gasoline car...WITHOUT BATTERY. So i guess this mass production of battery is still not enough to bring the battery cost down.

Why is it so obvious to a smuck like me that U.S. industry should be making these same investments (maybe tenfold) and it's not obvious to U.S. industry and govt?

The U.S. should stop playing catch-up and take the lead in this stategic area.

Nissan and Renault have an agreement with "Better Place." to supply chassis by Renault and Batteries by Nissan to Israel, Denmark, Portugal, and Australia. So they already have a ready market for the batteries. There are 15 million autos to replace with BEVs in Australia. So, the market is huge. All this while U.S. auto makers wring their hands and sing "woe is me" to Congress. Sad isn't it?

This bold announcement by the two large companies in this economic environment, where many projects get cancelled or postponed, especially very expensive ones, tells alot.

First that they are very confident of their lithium-ion battery and manufacturing technology.
They are not gamblers. They wouldn't be investing in a factory if battery test results were not very satisfying, which means the batteries met the expectations regarding the abuse tolerance, cycle life, calendar life, env temperature, cooling (they use flat batteries easy to cool), safety, cell balancing,...

Also they must have already in place a reliable and inexpensive manufacturing method with high yield (Altairnano apparently lacks that).
And they know what competitors are doing. Based on all this they know (with very high likelyhood) that in 2011 they will be able to sell all their production, as it will take years for others to build the production capacity.
For somebone to invest in production capacity, they first must have a thoroughly tested product in order for an investment in a factory to be approved.

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