Nissan in Deep Doo Doo After Deciding to Go Bigly Into An Electric Vehicle Market That Wasn't There

The Daily Mail just put out a rather dark and gloomy story with the following headline:

Major car manufacturer 'on the brink of collapse' as official claims company has 'just 12 months to survive'

The major car manufacturer is Nissan and here are the especially gloomy opening paragraphs (emphasis added):

Car manufacturing giant Nissan could be on the brink of collapse with only 12 months to survive, it has been warned.

The Japanese auto firm which employs 7,000 people in the UK and 17,000 in the US has embarked on a huge cost-cutting programme after suffering heavy losses.

Nissan said last month it would axe 9,000 jobs and 20 per cent of its global manufacturing capacity, as it scrambles to reduce costs by $2.6billion (£2billion) in the current fiscal year amid a sales slump in China and the US, its two biggest markets.

Chief executive Makoto Uchida is taking a 50 per cent pay cut and it has now been reported that chief financial officer Stephen Ma is stepping down.

But insiders fear the moves may not be enough as Nissan struggles to stay competitive with rivals who have pushed ahead more successfully with popular hybrid cars.

One might think, from that last line about hybrids, that the problem is a failure by Nissan to get into the whole energy transition thing, but the missing context is that hybrids are the alternative to EVs for that portion of the car market. Other companies didn’t go quite as far out on the EV limb and have backed away more quickly to shift their corporate virtue signaling to hybrids, which make much more sense to car buyers.

Nissan made some truly ridiculous commitments to EVs. According to a 2021 InsideEVs story, this was how ridiculous:

Following the White House's official announcement of the electrification target for the U.S., Nissan has announced that by 2030, 40% of its vehicle sales in the U.S. will be all-electric vehicles.

Move ahead to 2024 and this was the story from EV advocating InsideEVs:

Nissan vehicle sales in the United States during the first quarter of 2024 increased by 8.5% year-over-year to 238,831. Unfortunately, EV sales barely increased this time.

In Q1, Nissan's all-electric car sales amounted to 5,284, 1% more than a year ago and only slightly more than in Q4 2023 (5,113). The EV share out of the brand's total volume amounted to 2.2% (compared to 2.4% a year ago).

Now, moving back to the Daily Mail we learn this:

Meanwhile, Nissan also last month called for urgent action to avoid car makers being penalised for the slowdown in electric vehicle sales in the UK which the firm blamed on outdated targets in the country's Zero Emissions Vehicles Mandate.

The mandate forces firms to increase the proportion of EVs they sell each year until a total ban on new petrol and diesel motors in 2030.

This year, EVs must make up 22 per cent of a firm’s car sales and 10 per cent of van sales, with the threshold rising annually and makers facing a £15,000 fine for every sale beyond it.

Labour’s 2030 target is five years earlier than that set by former Tory prime minister Rishi Sunak.

And Nissan said that missing the target would lead to significant fines for manufacturers unless credits are purchased from EV-only brands - none of which manufacture in the UK.

The firm called for more flexibility on borrowing credits from future years and a two-year monitoring period for 2024 and 2025 instead of possible fines for car makers.

Guillaume Cartier, chairman of the Nissan Africa, Middle East, India, Europe and Oceania region, said: 'It risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment.

'We now need to see urgent action from the Government by the end of the year to avoid a potentially irreversible impact.'

Manufacturers say they support Net Zero but a lack of demand for EVs has left firms struggling to make the investment, with many motorists said to have been put off by high prices and a lack of charging points.

Lisa Brankin, the chairman and managing director of Ford UK, last week called for the Government to urgently introduce 'incentives' such as tax breaks to convince drivers to switch away from petrol and diesel.

She said: 'As an industry we have repeatedly said that we support the Government's trajectory and we support the ambition that the Government has set out, it's just that there isn't customer demand.'

The Society of Motor Manufacturers and Traders has voiced fears that the pace of the transition could hit car makers as demand for zero-emission vehicles 'failed to meet ambition'.

The organisation forecasts a slowdown in consumer demand meant EV sales would only reach 18.5 per cent of the total market, against the 2024 ZEV Mandate target of 22 per cent.

Chancellor Rachel Reeves has said the Government would ensure 'proper support' for the car industry as it phases out sales of new petrol and diesel vehicles.

She told broadcasters last week: 'We are committed to the 2030 target for phasing out the purchase of new petrol and diesel cars, but it is really important within that to make sure that we get the balance right and have proper support for the automotive sector, for the car industry in Britain.

'We have just launched a consultation to look at the plans that we inherited from the previous government which would have meant fines for businesses that didn't sell a proportion of electric vehicles, because we want to keep investment, we want to keep jobs in Britain.'

Could the commentary from the government, Nissan and Ford get any worse? No, it reflects the massive problem with our ruling class of elites; a complete and utter failure to speak honestly and act accordingly.

Ford and Nissan got in this trouble by acquiescing to government virtue signaling with the vain hopes of capitalizing on corporatism (collusion with government) when they should have fought the insanity with everything they had. They willingly got co-opted by the government, are still playing along as an economic guillotine hangs over their head, and now the latter says, ‘we'll throw some more bones your way’ by which they mean delays and/or subsidies, when what really needs to happen is a complete scrapping of the entire scheme.

Nissan isn't going to be saved by this. It’s simply feeding a crocodile that wants to eat it, too. The company surely knows this, but is afraid or unwilling to speak the truth, and that is the fundamental flaw with so much of our civil society today. It’s also why Trump got elected again. He’s the one man at the top who’s willing to say none of this makes sense, it's all a scam, and that he’s going to do something about it, like pulling out of the Paris Agreement and fighting back against China’s attempt to destroy Detroit.

#Nissan #EVs #Ford #UK #Labour #Biden