Nissan may produce the Leaf EV in China

Article by Christian Andrei, on March 20, 2013

The Chinese government said that Nissan Motor Co. may produce Leaf electric vehicles in the southern Chinese province of Guangdong. On the website of the National Development and Reform Commission's Guangdong branch, it was revealed that Nissan’s (Japan's second-largest automaker) Chinese joint venture with Dongfeng Motor Group Co. may invest 2 billion yuan ($322 million) on the project.

Under this plan, it will start off with having a capacity of 10,000 Leaf units annually and 50,000 after 2015. This is comparable to the capacities of Nissan’s plants in the U.K. and Japan. Nissan hasn’t yet responded to this report. Currently, Nissan’s production of the Leaf is located in the U.S. and Japan.

China, which is falling behind its sales goal of 5 million electric vehicles by 2020, is studying its subsidy policy and may raise funding for hybrid vehicles and other fuel-efficient models, Industry Minister Miao Wei said.

Just locally built electric vehicles were eligible for central government subsidies of up to 60,000 yuan, with the exception of local incentives, under a three- year trial program that expired at the end of 2012. Nissan CEO Carlos Ghosn had estimated that electric vehicles would make up at least 10% of global auto sales by 2020.

Selling the model has been difficult, with 2012 Leaf sales in the U.S. not even getting to 50% of its previous target. Nissan had recently placed its EV business under the direct supervision of the CEO. Building Leaf units in Guangdong is one of the major new-energy vehicle projects indicated in a 2013-2020 plan that the provincial government released.

Guangdong is also the location for BYD Co., manufacturer of the e6 electric car in which one of Warren Buffett's holding companies owns a stake. According further to the statement, the Guangdong province seeks to produce its annual production capacity for alternative-energy vehicles to over 200,000 units annually by 2015 and increase sales to 50,000 units by that time.

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