Even though 2022 was a year to forget, Nissan is thinking ahead and is investing $250 million to expand its powertrain plant in Tennessee, USA.
Nissan had a forgettable 2022 in the United States, with sales falling 25.4% as they only sold 729,350 units, raising concerns for the manufacturer.
According to Nissan CEO Makoto Uchida, who recently approved this $250 million investment for the Tennessee production facility, he cites that the all-electric vehicle market is growing faster than expected and Nissan intends to accelerate its electrification plans for the US market.
Nissan sells just two electric vehicles; the old Leaf and the new Ariya crossover, which is assembled in Japan and exported to other countries
One of the factors that Nissan identified as a critical driver toward EVs is the financial commitment of the Biden administration, through the Inflation Reduction Act (IRA), to increase EV tax credits for consumers. and investment in the necessary infrastructure.
“The world is accommodating electric vehicles much faster than we thought in the past,” said Uchida. “The electrification rate in each market will probably grow faster than we thought.”
The surge in EV demand is happening because more automakers are getting on board. Increased competition often leads to increased demand.
Consumers are also becoming increasingly interested in low-emission vehicles, and the mix of EV incentives creates a favorable environment for EVs. It won’t happen overnight, but Nissan management sees what’s coming.
The Treasury Department recently changed the law to allow foreign-made electric vehicles to qualify for the tax credit. That’s a good step, but it doesn’t solve everything immediately.
Nissan’s plant in Decherd, Tennessee, currently builds about 1.4 million internal combustion engines a year, ranging from the 5.6-liter V8 to the 1.5-liter three-cylinder engine. The facility also produces the Leaf’s electric motor.
Nissan had committed $750 million to its US electrification plans, with more to come, so it would make sense for the new investment to expand electric motor production. ,
The Japanese manufacturer has confirmed an investment of almost $16 billion in solar power in global electrification efforts through 2026. An investment that analysts see as fanciful.
Nissan continues to invest heavily in solid-state batteries, though they won’t be ready for mass production until 2028, when new electric vehicles are ready for launch around that time.