Nissan promised to launch one of the first solid-state batteries on the market, which are expected to revolutionize the electric car industry. However, brands like Toyota have indicated that these batteries won’t be particularly affordable, and it may take time before we see them in vehicles priced within the average market range.
Nissan definitely has a lot of experience with electric cars. In partnership with Renault, the companies successfully introduced two models that became very popular in some countries: Renault’s ZOE and Nissan’s LEAF.
However, the Japanese company is currently facing a serious crisis. Even Nissan’s management has acknowledged it. After some challenging financial results, the company has announced a restructuring plan that will include the dismissal of 9,000 employees.
An Unprecedented Crisis
Nissan has been on quite a roller coaster over the last few days, but it remains deeply entrenched in one of the biggest crises in its history. In fact, this is perhaps the most significant crisis due to the challenges it presents. The company is at a turning point, striving to completely restructure itself with the electric car as a key focus.
As part of its future roadmap, Nissan planned to update its lineup by introducing up to 19 new electrified or fully electric models by 2030. Before that, it wanted to launch the first car equipped with solid-state batteries by 2028, envisioned as an electric version of the Nissan GTR.
However, the results from the last quarter have underscored the economic difficulties the company is currently facing. In a recent statement, the Japanese automaker disclosed a staggering 70% drop in its profit outlook for the end of the year. According to Reuters, this amounts to around $975 million. This marks the second time the company has revised its profit forecast this year.
The consolidated results aren’t encouraging, either. Between April and September, the company’s operating profit fell by 90% to $214 million. If the current forecasts hold true when the fiscal year ends in March 2025, the operating profit for 2023 will be $3.6 billion. This will be a significant drop from the $975 million previously reported, according to The New York Times.
In recent months, the company seems to have made poor decisions in various markets. In China, its sales volume has significantly decreased, with the market shifting towards electric vehicles and favoring local companies over foreign ones. In fact, Nissan’s situation isn’t unique in this context, and sales from German automobile manufacturers are also declining in the country.
However, an unexpected challenge has arisen in the U.S., a key market for Nissan. American customers are increasingly opting for hybrid cars, but Nissan hasn’t provided alternatives that compete effectively with what Toyota offers. Toyota’s sales in the U.S. have soared as a result.
According to Bloomberg, this is one of the major issues Nissan is currently facing. Analysts suggest that the Japanese company must take action, given that competitors such as Honda and Toyota, which have embraced hybrid technology, are achieving strong profitability.
In this context, Nissan is undergoing a significant restructuring process that entails saving $2.6 billion, reducing global production by 20%, and laying off approximately 9,000 employees worldwide, which represents 7% of the company’s workforce.
Nissan CEO Makoto Uchida recently said, “Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment.” Additionally, Uchida will take a 50% salary cut, and other executive committee members will also “voluntarily” accept a pay reduction, although the specifics haven’t been disclosed.
In response to these changes, Bloomberg reports that fund provider Suntera acquired a 2.5% stake in Nissan’s shares, providing a slight boost to their value. The shares plummeted on the day the financial results were presented. Meanwhile, the long-term trend is also concerning, with a 40% decline compared to five years ago.
Image | Kenjiro Yagi
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