Nissan Ending Gas Engine Development Everywhere But America

Feb. 08, 2022 4:41 PM ET by Jay Traugott Industry News / 4 Comments

Another automaker will join the electrification era.

The writing is on the wall and, one by one, automakers are reacting. The latest appears to be Nissan. According to Nikkei Asia, the Japanese automaker, which makes up one-third of the Renault-Nissan-Mitsubishi alliance, is moving forward with plans to end development of new combustion engines in all global markets, with one exception: the US. Nissan has not officially confirmed the news but it's probably only a matter of time. CarBuzz reached out to Nissan and was told the following: "We don't have any immediate comment to share on this speculative report."

For the record, Nissan has already ended ICE development in Europe due to new Euro 7 emissions requirements, which begin in 2025; expanding this globally is the next logical step. But the US remains the exception (for now) for a very specific reason: pickup trucks. The redesigned Nissan Frontier just hit the market and it wasn't engineered to accommodate a fully electrified powertrain.

It'll still require a combustion engine for what's expected to be a long life cycle. Truck demand, in general, remains extremely high in the US, and on the whole, this group of buyers is not yet ready to embrace electrification. Nissan will, however, continue to improve ICE designs for the foreseeable future. Production plants that build these engines will remain open as well and no jobs cuts are currently expected.

Nissan engineers currently in the ICE department will be moved to other divisions such as EV motors and hybrid engines. Nissan was the first mainstream automaker to launch an EV, the first-generation Leaf, back in 2011. Now in its second generation, which itself is aging fast, the Leaf helped put Nissan on the EV map. The all-new Ariya crossover will be Nissan's second EV on the market once it goes on sale in the coming months.

We don't know whether Nissan's two alliance partners also have immediate plans to end combustion engine development, but there is a $26 billion plan in place to go electric. On both a global and US national level, EVs are not strong sellers right now, though that's going to change in the coming years. Globally, a total of 67.5 million gas-engined passenger vehicles were sold in 2021. That's 15 times the number of EVs sold during the same period. However, industry analysts predict somewhere in the neighborhood of nearly 47 million EVs will be sold annually in 2033.

ICE vehicles, meanwhile, are expected to sell 20 percent less by that time. In other words, the EV market could see a tenfold expansion in the next 12 years.