Time: April 18, 2023, 13:00-13:45
Venue: Nissan Car Exhibition Stand
Interviewees:
- Mr. Ashwani Gupta, Member of the Board of Directors and Representative Executive Officer of Nissan Motor Co., Ltd., and Chief Operating Officer;
- Mr. Shohei YAMAZAKI, Global Senior Vice President of Nissan Motor Co., Ltd., Chairman of Nissan China Management Committee, and President of Dongfeng Motor Corporation;
- Mr. Masashi Matsuyama, Vice President of Nissan Motor Co., Ltd., and General Manager of Nissan (China) Investment Co., Ltd.;
- Mr. Xin Yu, General Manager of Dongfeng Nissan Passenger Vehicle Company.
1. Opening Remarks
Ashwani Gupta: Good afternoon, everyone! Thank you very much for attending the Nissan Motor media communication meeting. This is a very good opportunity, and it is the first time for me to sit here and communicate face-to-face with you in three years. You have also seen that the Chinese auto industry has undergone tremendous changes in these three years. When I came to China, I truly felt the changes in China.
Today, I am also very pleased to share with you that by 2026, Nissan Motor will launch seven electrified models in the Chinese market, and electrified models will account for 80% of the Chinese market by 2030. This is consistent with the goal of accelerating electrification development announced in our “Nissan Ambition 2030” in 2021. In addition to electrified models, the more important point is that we will use software-defined vehicles to design products, with more vehicles driven by software applications to bring you a richer experience.
So there are two points of change. First, we will accelerate the electrification process through software-defined vehicles. Second, specifically, we will launch seven electrified models in the Chinese market by 2026, and electrified models will account for 80% of the Chinese market by 2030.
2. Media Q&A
Host: Thank you, Mr. Gupta. Now it’s the free question session.Q1: Today we showcased two concept cars at the auto show. Could you tell us what significance these two concept cars have for Nissan’s electrification strategy in China? When is the planned production and launch date for the concept car designed for the Chinese market?
Ashwani Gupta: Firstly, we showcased two concept cars at this year’s Shanghai auto show. The first concept car is the Max-Out, which is designed based on excellent engineering technology to achieve more freedom in transportation. When we achieve freedom of transportation, we can enjoy the entertainment inside the car and experience the driving pleasure of the vehicle. This means that consumers can enjoy every lifestyle in the Max-Out concept car. The excellent engineering technology is reflected in the compact assembly process, which maximizes the use of space. The Max-Out concept car is a representative of Nissan’s future electrified vehicles, integrating energy storage batteries, electrified powertrain systems, and the magic carpet platform into the most compact assembly.
The second one is the Nissan Arizon concept car, a low-center-of-gravity electric vehicle that can provide an exciting driving experience for electric vehicles. At the same time, the graphical user interface (GUI) is fully integrated into the cockpit interior, which means that the graphical user interface can bring diverse lifestyles to users while driving.
The two models finally showcased software-driven electrified vehicles, which is the future development trend of the Chinese market in Nissan’s strategy.
Q2: Just now, you introduced the concept car designed and developed for the Chinese market. Could you specifically explain which aspects reflect this?
Ashwani Gupta: It is too early to define the specific specifications of these two concept cars, as they have not yet been designed as mass production models. As I said before, we are pleased to announce today that by 2026, we will have seven electrified vehicles in the Chinese market, and by 2030, the proportion of electrified vehicles in the Chinese market will reach 80\%. Again, we emphasize that our core strategy is the software-defined vehicle, which not only relates to technology but also how our software will bring unique and exclusive experiences to Chinese consumers.
Q3: This auto show is different from previous years, with serious internal competition for electrification. As an international brand, how does Nissan view this competition? How will Nissan improve the electrification process based on different regional markets, such as China?
(tags: HTML)古普塔（Ashwani Gupta）：关于技术储备的问题，从内燃发动机到超混电驱动e-POWER技术再到纯电动技术，日产汽车引入中国的每一个技术平台都非常重要。在自动驾驶方面，我们还有ProPILOT自动驾驶技术以及车辆安全和车辆行驶技术。我们深知中国市场非常先进，我们一直致力于将日产汽车的先进技术带给中国，过去如此，将来也是如此。因此，在未来，我们将在中国市场着重实现全球化技术的本地化，并将中国研发的技术应用于中国市场。例如，我们今天发布的Arizon概念车就是日产汽车在中国市场“为中国”推出的一个重要体现。
至于第二个问题，就中国汽车产品价格的竞争焦点而言，日产电驱系统将通过改进成本管理和优化技术储备等方式获得竞争优势。在中国市场，我们还将继续积极提高生产效率和产品质量，以满足消费者对电驱动汽车不断增长的需求。Shohei YAMAZAKI: Regarding the second question, as we all know, the price competition in the Chinese market is very fierce. To overcome the impact of price competition in the Chinese market and improve Nissan’s competitiveness in the Chinese market, I think the key is to push our products to the market faster, shorten the R&D cycle, because the lengthy R&D cycle will inevitably lead to cost increase; In order to shorten the R&D cycle, we need to accurately grasp the needs of the Chinese market and carry out R&D under the commitment of “In China, for China”. This is the second measure we take to improve our price competitiveness; The third measure is to fully utilize local suppliers and local assets. These three factors can make our electric vehicle products have enough price competitiveness in the Chinese market and compete with local automakers.
Q5: You have mentioned many times just now, that you have come to China today and have seen so many new aspiring vehicles at the Auto Show. What do you think of China’s smart electric vehicle industry? Two years ago, you mentioned that you wanted to be a Game Changer. What is your thinking behind it? China’s software industry is developing very quickly. Will Nissan look for local Chinese companies as software partners?
Ashwani Gupta: Thank you, this is a very good question. As I mentioned earlier, three years ago we talked about electrification, and now after three years, when we look at the Chinese market again, it is not just electrification anymore. Chinese consumers are familiar with the value brought by Software-Defined Vehicle, which is what we call Rule Changer. Therefore, nearly 30\% of products in the Chinese market have achieved electrification in a very short period of time. We will also follow this trend and lead the trend. For example, ARIYA has OTAs function, and the next generation of electric cars will also be equipped with software-defined technology.
As you said, we are open to partnerships and hope to work with partners, including local Chinese partners. Local partners know the Chinese market better, so we hope to cooperate with them on software to provide better services to consumers.
Q6: A Chinese electric vehicle manufacturer predicts that the cost of electric vehicle transmission systems will be reduced by 25\% by the end of next year, and the cost of advanced driver assistance systems (ADAS) will be reduced by 50\%. Do you think this cost reduction is feasible for Nissan? Also, do you think battery technology is advanced enough, not just for some economic micro-cars we mentioned earlier?Ashwani Gupta: The cost of Nissan’s electric drive powertrain system can be reduced by 30%. Today’s powertrain system includes five major components such as the inverter and electric motor. The next generation of electrified powertrain technology is “X-in-1”, an integrated power system technology where the core component weight will be reduced by over 25%, and costs will be reduced by 30%. It is certain that as Nissan develops towards this technology, our competitors are also developing towards these technical directions, which means that the overall cost of electrified powertrain systems will decrease, which is beneficial for consumers and will help the automotive industry shift from internal combustion engines to electrification.
Secondly, regarding battery technology, we know that half of the cost of a vehicle comes from the battery, so the battery determines the competitiveness of electrified vehicles. On the one hand, we need to ensure the best supply chain of raw materials, such as the fall in the prices of related raw materials such as lithium, which will inevitably benefit the reduction of battery costs. In addition, we also hope to improve battery performance through continuous technological breakthroughs. When we launched the first Nissan Leaf in 2010, a battery of similar size could achieve a driving range of 80 kilometers, while Nissan’s latest electric vehicle models can achieve a range of 400 to 500 kilometers according to NEDC comprehensive endurance. So you can see that in 13 years, battery performance has been greatly improved. Although the costs are similar, due to technological progress, the cost per kilowatt-hour is decreasing. We are developing the next generation of lithium-ion batteries that can offer better performance and lighter weight lithium-ion batteries.
Finally, the focus of our discussion today is the Max-Out concept car, which involves all-solid-state battery (ASSB) technology, which will become a game changer in the electric vehicle industry in terms of battery costs and performance. This technology will also bring more flexibility to vehicle integration and better fit the consumer’s lifestyle.
In summary, our electrified powertrain technology is developing towards a 30% cost reduction, there is still room for improvement in the performance and cost competitiveness of lithium-ion batteries, and all-solid-state batteries (ASSB) will become game changers to replace lithium-ion batteries.
Q7: Currently, there have been some major changes in the domestic automobile market in China. How do you view the development prospects of foreign companies in China? Please introduce Nissan’s next steps in layout and planning in China.Shohei YAMAZAKI: Thank you for the question. The Chinese market is changing rapidly in terms of technological development. Three years ago, the market share of electric vehicles was not as significant, but now it is booming. While we cannot predict the future, we believe that the trend of electric vehicles will continue to grow in China.
Moreover, from different geographic locations in China, electric vehicle penetration rates will be higher in coastal areas like Shanghai, but in some inland markets, it may take some time to catch up and achieve higher electric vehicle penetration rates, possibly due to infrastructure limitations.
So far, we have seen that 60% of electric vehicle consumers in China are first-time car buyers. This trend will gradually change, and we will start to see repeat buyers choosing electric vehicles. A crucial point is how our electric vehicle products can differentiate from our competitors because repeat buyers know what constitutes a good electric vehicle and what makes a good car. They want more personalized electric vehicles, and I believe this is the demand of repeat buyers. Therefore, our plan is not to catch up with Chinese electric vehicle brands, but to focus on product differentiation, such as through initiatives like software-defined vehicles.
Q8: Last week, the Environmental Protection Agency (EPA) proposed to reduce emissions from new cars and trucks by an average of 13% per year, with the goal of achieving it by 2032. How does Nissan view this proposal? How will Nissan respond to stricter emissions standards in the United States? What measures will Nissan take to ensure that new models comply with the stricter US emissions standards?
Ashwani Gupta: Indeed, we have seen this information, but we have not yet discussed in detail how it will affect our medium- to long-term product line. However, our strategy remains unchanged, and we are utilizing electrification as an important measure to meet corporate average fuel economy (CAFÉ) standards and GHG emissions regulations. We are now using the Infiniti Recovery Action (IRA) as one of the tools to accelerate electrification, which is also why we decided to invest $500 million to produce two new models. We are also considering the expansion of battery factories. We already have a battery factory in Tennessee, USA. Next, we will promote the localization of electrified powertrain systems. In the US, our main goal is to achieve localized development of electrification for the medium- to long-term. As for the net-zero targets, we have not yet finalized the impact of this emission value, but it will not change most of our strategic planning.Q9: The Chinese market is already the world’s largest automobile market. How does Nissan view the current situation of declining sales in the Chinese market? What solutions does Nissan have for this?
Ashwani Gupta: The Chinese market is very interesting. Before the establishment of our joint venture company, our TIV was much higher than that of local Chinese automakers for 5 years. Apparently, the overall TIV is increasing, and the TIV of each joint venture company is also increasing. Looking back at the data for 2022, half of the TIV data comes from local Chinese automakers, while the other half comes from joint venture automakers in China. This indicates that the total TIV of all joint venture companies has declined because the overall TIV has not increased significantly. This means that local automakers have already seized a larger market share from the joint venture market. This is also true for Nissan, and more or less for other automakers. This trend is evident.
Our main focus now is why we should continue to develop in the Chinese market and how to develop, especially as we approach the 50th anniversary of our development in China and 20 years of cooperation with our Chinese partners. We need to fully seize the opportunity of rapidly developing and changing the market.
Further analysis shows that Chinese automakers are mainly developing electric vehicles. Today, I am talking about software-defined electric vehicles. This means that if we want to continue to grow in the Chinese market, on the one hand, we must continue to invest in joint venture TIV and maintain competitiveness in traditional ICE and other specific markets. On the other hand, we must prepare software-defined electric vehicles at a faster speed to occupy the market and compete with local Chinese automakers.
I believe that there is little difference between local and joint venture automakers in China and both have to possess the same technical capabilities. From now on, we should talk about the entire Chinese market instead of the distinction between joint ventures and local automakers because these together form the whole automobile market. This is a key issue for us, and we have decided to launch 7 software-defined electrified models in the Chinese market.
Q10: Currently, intelligent driving and human-machine interaction have become key factors affecting consumers’ decisions. However, in the Chinese market, traditional automakers, including Nissan, are clearly behind Chinese domestic brands. What measures will Nissan take in this regard?Ashwani Gupta: I am not sure if we are behind or ahead. It is difficult to judge because all of our vehicles are equipped with intelligent connected functions. However, what is more important is that we need to learn from the Chinese market. In the past three years, the market in China has valued software-driven electrified models, rather than just electric vehicles with software added on. Three years ago, I would have been satisfied with an electric vehicle equipped with intelligent connected functions, as cars could be connected. But now, software-defined vehicles are a turning point. Previously, software was just an add-on feature, but now it is the core of the car, which is where China is truly leading. This is not just about Nissan cars.
I believe that as a whole, the Chinese automotive market has taken a leadership position in driving the development of the global automotive market, creating an important service approach for consumers in developing software-defined vehicles and even allowing consumers to fully integrate their lifestyles into mobility services.
Q11: Looking around the venue, most of the models are electric. Nissan also released the e-POWER hybrid version of Qijun and the pure electric concept car. Including pure electric and hybrid models, China’s electrification trend is significant. Today, Honda also plans to double the number of pure electric models. What is Nissan’s view on this?
Ashwani Gupta: Nissan’s e-POWER and pure electric technologies are the two pillars of Nissan’s electrification strategy. In Japan, we are leading in e-POWER and pure electric technologies. In the Japanese market, we launched the pure electric model Nissan Sakura, which is a groundbreaking model that occupies 40\% of the segment market share. In the Chinese market, we launched the e-POWER hybrid version of Yaxuan and now we will also launch the e-POWER hybrid version of Qijun. At the same time, we are also promoting the development of pure electric vehicles. We regard e-POWER and pure electric technologies as the pillars of electrification because we believe that consumers eventually decide the market.
Different vehicle combinations will be launched for different markets. For example, in Europe, approximately 98\% of vehicle models will be pure electric vehicles by fiscal year 2026, while in Japan, this ratio will be 50\%-55\%. In the Chinese market, three years ago, we thought that there would be a process from internal combustion engine to e-POWER, and then to pure electric technology. However, seeing the changes happening in China today, I believe that China will soon achieve electrification. Driven by software, Nissan will continue to promote the development of e-POWER technology. This is an advanced technology that is particularly suitable for consumers who care about vehicle quietness, acceleration performance and energy consumption. At the same time, because this technology is 100\% electrically driven and does not need external charging, there is no need to worry about charging. Therefore, we will continue to promote this technology in the Chinese market.At the same time, the speed at which we dominate the pure electric vehicle market depends not only on pure electric vehicles themselves, but more importantly on how quickly we can introduce software-defined pure electric models. Therefore, we will develop both e-POWER and pure electric technologies simultaneously. However, in terms of pure electric technology, we will take swift action to integrate software.
Q12: Mr. Gupta mentioned software-defined cars several times, and we know that OEMs are self-developing their own software systems. I’d like to ask about Nissan’s planning in this area. For example, Toyota is pushing Arene, Honda and Sony are developing car OS. You mentioned software-defined cars many times. What specific plans does Nissan have? Will it integrate into an existing system or are there other plans?
Ashwani Gupta: When it comes to software-defined cars, there are two things to note. One is whether the automotive electronic electrical architecture is centralised or distributed, and the other is the software related to it. I talked more about the software layer. We have more than 4,000 software engineers worldwide involved in software development. We have decided to develop critical vehicle control and safety-related software, such as battery management systems, autonomous driving systems, chassis control, etc., internally because this involves safety and Nissan’s unique competitive advantage. Mass-market software for the general public mainly comes from IT companies such as Google and Microsoft. We cooperate with these companies to develop software related to the vehicle interior. In short, what involves advanced mobility and Nissan’s competitiveness will be our own software. We already have more than 4,000 software engineers working on this. Standardised mass-market software, such as software used on consumer smartphones and televisions, will be used as standard software by our partners.
Q13: Currently in the Chinese market, Nissan has been strengthening the layout of e-POWER products, but from a policy perspective, e-POWER models are not new energy vehicles, and Chinese consumers do not particularly recognise them. Does Nissan have any plans to localise e-POWER technology? For example, GAC Honda is localising PHEV.
Ashwani Gupta: First, e-POWER technology has unique consumer value. Obviously, we did not launch this technology for the sole purpose of satisfying new energy vehicle qualifications. This is not our strategy. Our strategy is to bring the passion and stillness of pure electric vehicles without the need for a plug, encouraging people to explore. This is our strategy. As for new energy vehicles, we are actively advancing the development of pure electric vehicles to meet the standard requirements of new energy vehicles. Speaking of this, everyone knows that Nissan also has plug-in hybrid electric vehicle (PHEV) technology. Analyzing the current Chinese market, we will study and consider whether to launch PHEV in China. Currently, e-POWER technology and pure electric technology are our two main pillars. We will study and consider the PHEV issue in the Chinese market, particularly the trend of new energy vehicles.Q14: Hello to all Nissan leaders. Earlier, you mentioned that upon returning to China, you saw a significant increase in the quantity and quality of new energy vehicles on the streets. However, another important point is that the construction of electric vehicle charging and energy replenishment systems has also improved greatly compared to two years ago. We have seen new automakers, such as NIO, building their own energy replenishment systems – for example, NIO’s third-generation battery swapping station can replenish energy in just 5 minutes. Also, XPENG’s superfast charging has achieved 500 to 600 kilowatts of power. The press conferences of the three Japanese car brands have all talked about electric vehicles, but none have talked about how to establish a network of energy replenishment systems. We would like to ask Nissan leaders how you are considering this issue.
Ashwani Gupta: I think this is very important. I believe we should talk about the charging infrastructure. Moreover, we need to talk about the ecosystem. In Japan, we discuss not only the charging infrastructure, but also the ecosystem, which includes recycling and battery regenerations. I think it is now time for China to start discussing the entire ecosystem, not just electric vehicles themselves. If electrification already accounts for 30% of the market share, then there will be the problem of aging batteries in a few years. What should we do with these batteries? Should we recycle them or regenerate them? Nissan is currently working on this issue. Perhaps Mr. Xinyu can talk about the charging strategy of the ARIYA vehicle.
Xinyu: The energy replenishment network is a hot topic right now. With the development of battery technology, we have noticed that the biggest obstacle to maximize the efficiency of the energy replenishment system is the charging time. If the charging time can be kept below 20 minutes, customers may not leave their vehicles and may think refueling and charging are no different. Once the charging time exceeds 30 minutes or more, it is highly probable that the customer will leave the vehicle at the charging station, rendering it unusable by others. Currently, through our Eco System, including our ARIYA, we already have the information to see if the vehicle is charging in front of the charging station. I think that in addition to the technology route of battery swapping, fast charging, etc., the breakthrough and fundamental change in battery technology itself is also an important consideration in building a charging network. But as Mr. Gupta mentioned, Nissan has a complete system for recycling and reusing batteries. Of course, we cannot disclose it to everyone yet. We prefer to wait until there is a clear development path for future battery technology before sharing our plan with everyone.
III. Summary Speech
Ashwani Gupta: Once again, thank you all for this great opportunity. It’s been three years since we last visited here, and we have witnessed the tremendous changes happening in the Chinese market. We are delighted to see China leading the world in technological breakthroughs.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.