Pivot to Electric: EVs’ Growing Status in the Japanese Auto Industry

Yasui Takayuki [Profile]

[2017.12.07] Read in: 日本語 | Русский |

The combustible engine has been the heart of the automobile industry since the invention of the car more than 130 years ago. But in the face of environmental concerns, electric vehicles have emerged to challenge this supremacy. Japanese manufacturers like Nissan are maneuvering to lead the ongoing shift toward adopting EV technology.

The race in the budding electric vehicle market is heating up amid a flurry of new models by US and Japanese carmakers and a shift toward EVs in Europe. US-based Tesla is ramping up production of its recently released Model 3. And in early October Nissan launched a remodeled version of its Leaf in Japan with plans to expand to Europe and the United States in January 2018.

For Nissan, the new Leaf represents the first remake of its flagship EV in nearly seven years. The car boasts an array of improvements on the 2010 model, including a two-fold increase in range to 400 kilometers on a single charge and a 110-kW motor with 38% more power.

As EVs garner greater interest in Japan and abroad, Nissan CEO Saikawa Hiroto says the vehicles are on the verge of competing with conventional automobiles for customers. The only hurdle remaining is sticker price. The new Leaf runs from ¥3,150,000 to ¥3,990,000, putting it on par with the first-generation model. However, it offers a slew of new technologies, including a “smart” parking assistance system.

As the world’s first mass-produced EV, the Leaf exceeded all expectations, even those of Nissan head Carlos Ghosn, and has sold around 280,000 units since it launched seven years ago. In rolling out its new model, Nissan is looking to lead the charge into the burgeoning global demand for EVs. The automaker expects to sell nearly three times as many of its revamped Leaf compared to its predecessor, or roughly 2,000 to 3,000 a month.

The Coming Electric Revolution

The pivot to electric vehicles is in part the result of the revelation that global leader Volkswagen rigged emissions testing on some of its diesel models. Europe embraced diesel cars for their environmental friendliness such as low carbon dioxide output. However, the Volkswagen scandal and growing awareness of the negative health effects from nitrogen oxides and other emissions have swung momentum toward zero-emission vehicles. Countries like Britain and France have even announced they will halt all sales of gasoline and diesel cars by 2040.

In the United States, Elon Musk and Tesla Motors are trying to carve a niche for all-electric vehicles to compete in the traditional car market. The firm has been able to rival established high-end automakers like Mercedes Benz and Porsche with its premium brand of mass-market EVs, including the new Model 3 launched earlier this year.

Amid all the buzz, many experts now say EVs could potentially turn the auto industry on its head. As Musk has helped illustrate, the production model for EVs is edging closer to that of IT gadgets like personal computers and smart appliances instead of traditional cars. Electric motors, batteries, and other core components can be easily procured and assembled just about anywhere, significantly lowering the barrier for automotive startups. According to some in the field, this ease of production will eventually succeed in transforming cars into interchangeable commodities.

Established automakers in Japan and elsewhere, however, are apprehensive about this trend. Toyota President Toyoda Akio at an August press conference announcing his company’s tie-up with Mazda said it would be unacceptable to allow cars to become commodities. His concern is easy to understand. Toyota has built its reputation on performance, and the standardization of EVs would undermine the firm’s competitive advantage by making it less of a defining factor for customers.

Nissan’s Saikawa has echoed this sentiment by explicitly stating that commoditization will not occur. Sakamoto Hideyuki, executive vice president for production engineering at Nissan, has even gone so far as to warn newcomers against oversimplifying the market, pointing out that quality and performance are just as important with EVs as standard vehicles. “EVs have more automation than gas-powered cars,” Sakamoto explains. “The ability of manufacturers to introduce new and better technologies will be what separates the field.”

Coordination Key

The notion that EVs are less complex and thus easier to manufacture is misguided. Certainly, they require 40% fewer parts than the roughly 30,000 that go into a conventional car. But even with the same engine under the hood, differences in body, suspension, and other factors greatly affect the driving experience. Every component must be optimized to improve riding comfort or boost speed, requiring careful coordination of all team members from initial design to final production. What makes or breaks a model is a manufacturer’s ability to test and tweak the various parts and assemble these into a smoothly working whole.

Looking at the Leaf, Nissan extended the new model’s range by boosting efficiency of its motor and lithium-ion battery while keeping the battery pack roughly the same size. This was accomplished by a careful coordination of its control, materials, and mechanical engineering teams to refine aerodynamic design, lighten parts, and improve the suspension system.

Plug-in cars offer new arenas for innovation and Nissan undertook fresh challenges with its e-pedal that combines accelerating and braking functions and its regenerative braking system. These new features are testament to the carmaker’s hard-earned technical prowess, although to make the Leaf commercially viable the firm had to perform a delicate balancing act between technologies and overall cost. Weight, performance, and design were all influential factors in striking a cost-effective balance, something that is impossible to achieve with a simple assembly-based model.

Realigning the Field

EVs are rapidly evolving, but they still face some significant barriers, not least their driving range. The new Leaf’s 400-kilometer range is suitable for Japanese roadways. However, it is less appealing on the German Autobahn and other roadways where higher speeds and longer distances will rapidly deplete the battery and shorten its range.

Charging time is another area where progress has been slow. The new Leaf offers a 40-minute quick charge, but a standard recharge will take 8 to 16 hours. There is also a concern of the battery going dead while on the road. To address the problem, some EVs have additional engines called range extenders dedicated to energy generation. These and other issue illustrate that even as cars move toward all-electric designs, the auto industry will remain reliant on standard technologies for the foreseeable future.

The automobile is at an important turning point in its 130-year history. Technological advances are rapidly changing the playing field in terms of performance and manufacturing methods. But even high-tech EVs cannot be easily snapped together like computers, smartphones, and other IT gadgets and still allay concerns of safety and trust implicit to their basic role as passenger vehicles. For this reason, established manufacturers will retain a competitive advantage over newcomers as the plug-in market moves forward.

Saikawa anticipates a surge of automotive startups in the next few years and says that the half decade between 2020 and 2025 will be the make-or-break period. It is still too early to tell if Nissan and other leading firms will stay at the top or if an innovative newcomer will take the lead.

(Originally published in Japanese on September 20, 2017. Banner photo: The revamped Nissan Leaf all-electric vehicle at its Japanese launch at Makuhari Messe in Chiba Prefecture on September 6, 2017. © Jiji.)

  • [2017.12.07]

Representative director of Gemba Lab and journalist. Born in 1957. Studied science and engineering at Waseda University and conducted research at the Tokyo Institute of Technology. Joined Asahi Shimbun in 1988, where he wrote about economic and industry issues. Became a member of the editorial board in 2005. In April 2017, left the newspaper and established Gemba Lab. He now works as a freelance journalist and is a member of the Japan National Press Club planning committee. Works include Korekara no yūryō kigyō (Future Blue-Chip Companies).

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