Nissan’s battery rethink could see reduced production in Sunderland and Tennessee

With a decision due next month regarding the future of the Nissan battery plants in Sunderland and Smyrna, Tennessee, news agency Reuters is reporting that company boss Carlos Ghosn is preparing to cut battery manufacturing – a move which re-opened deep divisions with alliance partner Renault, according to the agency.

The plan, which faces stiff resistance from within Nissan, would see US and British production phased out and a reduced output of next-generation batteries concentrated at its domestic plant. Citing a variety of sources, the news agency said Nissan would follow Renault by taking cheaper batteries from LG Chem in South Korea for some future vehicles, including models made in China.

“We set out to be a leader in battery manufacturing but it turned out to be less competitive than we’d wanted,” an anonymous executive told Reuters, adding: “We’re still between six months and a year behind LG in price-performance terms.”

Another source told reuters “Renault would clearly prefer to go further down the LG sourcing route, and the Nissan engineers would obviously prefer to stay in-house.

The write-off costs are potentially huge.” According to Reuters, Nissan is already negotiating with manufacturing partner NEC about the shift to dual sourcing, with Ghosn’s backing. However, Rachel Konrad, a spokesperson for the Alliance, told Reuters that Renault-Nissan “remains 100 per cent committed to its industry-leading electric vehicle programme” and had no plans to write down battery investments.

“We have not taken any decision whatsoever to modify battery sourcing allocation,” Konrad said, adding that the alliance “does not confirm or deny procurement reviews”.

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