Nissan’s rapid response to the much faster than expected developments of the EV evolution

While EV leaders Tesla Inc (NASDAQ: TSLA) and BYD Company Limited (OTC: BYDDY), along with legacy automakers Ford Motor (NYSE: F), General Motors (NYSE: GM) and Volkswagen AG (OTC: VWAGY), Bracing for Cooling demand for electric vehicles by scaling back or delaying plans, Nissan Motor Co Ltd (OTC: NSANY) has entered a new week by announcing the launch of 30 new models in the next three years, 16 of which will be electrified. The mid-term business plan update came in response to addressing extreme market volatility, with EV industry development and especially price pressures emerging much earlier than expected.

Nissan President and CEO Makoto Uchida stated that Nissan is now targeting to sell an additional 1 million vehicles by the end of fiscal year 2026, while also targeting an operating profit margin of more than 6% and a total shareholder return of more than 30% during the financial year. the same time frame, namely the year ending March 2027.

Collaboration is the way forward

While Nissan aims to reduce costs by 30% by the end of the decade, it will develop electric vehicles in ‘families’ by integrating powertrains and seeking to innovate the existing battery concept. Through smart partnerships, like the one Nissan has announced it is considering with its rival Honda Motor Co Ltd (NYSE: HMC), will help Nissan deal with cutthroat competitors. Earlier in March, Reuters reported that Nissan was considering a strategic partnership with Honda. Together, Nissan and Honda would work together to produce key EV components and develop AI in automotive software platforms. The potential partnership would help both Nissan and Honda achieve economies of scale as they are both threatened by BYD and Tesla.

Everyone agrees that there is a lot of uncertainty.

Like Tesla, which braced for a significantly slower growth rate, and GM, Ford and other automakers, Nissan agrees that the next five years will be full of uncertainty. Even resilient Chinese powerhouse BYD predicted a slower growth rate. Through collaborations, Nissan aims to address the challenges by achieving scalability, which Japan’s third-largest automaker by sales says is critical in overcoming the challenges ahead. With its plan, called the Arc, Nissan aims to ensure volume growth and prepare for an accelerated EV transition by balancing its portfolio between electric and combustion cars, while growing volumes in key markets and exercising financial discipline. Supported by smart partnerships, greater EV competitiveness, differentiated innovations and new revenue streams, Nissan expects the strategy to result in new business opportunities potentially generating approximately $16 billion in revenue by fiscal year 2030.

We often forget that like Tesla, Nissan is an EV pioneer, with its all-battery Leaf cementing the widespread adoption of EVs. But both Tesla and BYD overshadowed its EV efforts. But history does not have to repeat itself if Nissan learns from this experience, as the company aims to lay the foundation for long-term profitable growth with its current strategy.

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This article is from an unpaid external contributor. It does not represent Benzinga reporting and is not edited for content or accuracy.

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