Nissan Rescues Mitsubishi Even As It Gets More Aggressive with Tesla

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Nissan Mitsubishi

Nissan is getting aggressive these days, now extending a lifeline to scandal-plagued Mitsubishi on one side of the world even as it gets chippier with electric-power rival Tesla on the other.

As it reported improved operating results, Nissan announced on Thursday that it has acquired 34 percent of Mitsubishi and formed a “far-reaching strategic alliance” that will extend to common vehicle platforms, joint plant utilization and “growth markets,” expanding a lower-level tie they have had for five years. Mitsubishi also admitted that more models sold in Japan were affected by its systematic overstatements of fuel economy than first revealed.

Mitsubishi management even this week has been insisting that the company has enough cash to withstand the hits to sales and its finances from the mileage-inflation scandal that it said affects only models sold in Japan. But company leadership listened to Nissan CEO Carlos Ghosn, who has managed to make a success of Nissan’s tight alliance with Renault (he runs both companies) since it was formed in 1999.

Meanwhile, however, Nissan has been preoccupied with what to do about Tesla. Nissan pioneered the all-electric vehicle with Leaf in 2010, but sales have never amounted to much. Tesla, however, not only has created success from no automotive experience in a luxury-EV segment it essentially originated with its Model S, but also now intends to sell a less expensive all-electric Model 3 within a couple of years.

And after Tesla said recently that it’s received about 400,000 deposits of $1,000 (refundable) for a Model 3 that remains far from production, Nissan tweaked the whole thing with aggressive print ads that asked consumers why they aren’t just buying a Leaf EV that is available now at about the same price projected for Model 3 and about half the touted all-electric range of the eventual nameplate.

Now, in the UK at least, Nissan is trying to outflank Tesla in another way—by helping connect EV owners to the grid where they can sell power generated by their battery-propelled vehicles. Tesla has made a big deal of its Powerwall device that will do much the same thing.

But Nissan announced a partnership with Enel SpA that will enable drivers of Leaf and e-NV200 electric vans to sell excess energy during periods of peak demand, effectively turning those Nissan models into mobile power sources— as Powerwall plans to do. They’ll use an energy storage unit dubbed “xStorage” and made by Eaton, a US-based company, that will be priced at about 4,000 euros (US $4,560), according to Bloomberg.

For its part, Tesla keeps auto watchers surprised with CEO Elon Musk’s ever-accelerating schedule for meeting demand for Model 3, which he recently moved up a couple of years to volume output by 2018. Tesla, however, just parted with two of its top manufacturing executives and practically no outside observer gives the company a chance of ramping up from its current production of about 50,000 autos a year to its intended 500,000 Model 3 units within two years.

Yet Musk just keeps doubling down. Tesla said this week that it hasn’t even finalized the design of Model 3, which would call for a never-before-seen fast timetable to production to meet Musk’s new goal. He may have to visit that deadline yet again.

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