The automaker is now investing $250 million to expand its powertrain plant in Tennessee.
The all-electric vehicle market is growing faster than expected, according to Nissan CEO Makoto Uchida, who recently approved a $250 million investment for the automaker's Tennessee production plant to increase powertrain production.
Per Automotive News, Uchida did not go into specific details regarding that investment, such as when it will happen or what it will fund precisely. But the main takeaway here is that Nissan intends to speed up its US market electrification plans.
Currently, it sells just two EVs; the aging Leaf and the new Ariya crossover. One of the factors Nissan identified as playing a pivotal role in America's warming up to EVs is the Biden administration's financial commitment, via the Inflation Reduction Act (IRA), to increase EV tax credits to consumers and the investment in the necessary infrastructure.
"The world is accommodating EVs much faster than we thought in the past," said Uchida. "The electrification ratio in each market will probably grow faster than we thought."
Aside from the IRA, the EV demand increase is happening because more automakers are jumping on board. Increased competition often leads to increased demand. Consumers are also quickly becoming more interested in low-emission vehicles, and the combination of EV incentives creates an EV-friendly environment. It won't happen overnight, but Nissan management sees what's coming.
Nissan, like other foreign automakers, has openly criticized the IRA for only favoring domestic production. The Ariya, for example, is assembled in Japan and exported to other countries. The Treasury Department recently changed the law to allow overseas-built EVs to qualify for the tax credit. That's a good step, but it doesn't immediately solve everything.
"The IRA is maybe a challenge for us in the short term," he said. "But in the future, it will probably make for more penetration of the market by electric vehicles."
Nissan's Decherd, Tennessee plant currently builds about 1.4 million combustion engines annually, ranging from the 5.6-liter V8 for the Tundra and the Rogue's 1.5-liter three-cylinder. The facility also produces the Leaf's e-motor. Therefore, it'd make sense for that investment to expand electric motor production. With the new investment, Nissan has committed $750 million to its US electrification plans, and there's still more to come. It has already confirmed a nearly $16 billion investment in global electrification efforts through 2026.
Like BMW and others, Nissan continues to invest heavily in solid-state batteries though they won't be ready for mass production until 2028. New EVs are aimed at being prepared to launch by that time. Nissan could become a significant EV player by the decade's end, on par with GM, Ford, and other legacy brands.
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