Nissan Banks on China Subsidies to Boost Electric Cars

Nissan Motor Co. (7201), maker of the Leaf electric vehicle, said it is targeting to win 20 percent of EV sales in China as the central government steps up efforts to cut auto emissions and reduce air pollution.

EV sales in China may rise to 100,000 to 400,000 vehicles a year by 2017 to 2018, and Nissan expects to win about a fifth of the market, according to Jun Seki, head of Nissan’s China business. Actual demand will depend on the price of EV models, consumer anxiety about their range and ease of access to charging stations, he said.

China’s central and local governments have extended subsidies, exempted EVs from license-plate restrictions and pledged to expand the network of charging stations to encourage their adoption. Vice Premier Ma Kai said last month that buyers of electric cars may be exempted from paying purchase taxes as part of expanded state measures to bolster their sales.

“China is serious about pushing the adoption of new-energy vehicles, and no other country can compare with the subsidies that it’s giving out,” Seki said yesterday at the company’s headquarters in Yokohama, Japan. “The charging infrastructure will improve as sales volumes rise.”

To cater to the expected demand for EVs, Nissan will begin selling the first electric model -- the e30 -- under its China-only Venucia brand this year.

Pilot Programs

Nissan is working with the Chinese cities of Dalian, Guangzhou and Xiangyang on pilot programs to promote the Venucia-branded electric car, according to Seki. The company’s Leaf model remains the world’s best-selling electric car, with cumulative sales exceeding 100,000 units as of January. Last year, deliveries increased 76 percent to 47,547 units, after the company cut prices and extended the battery range.

Seki said yesterday that Nissan is finally back on track after tensions in 2012 between China and Japan over a group of disputed islands led to consumer boycotts of Japanese brands. The setback has delayed by one to two years the company’s target to reach 10 percent of China’s passenger-car market, which it originally expected by 2016, he said. The automaker’s market share stood at 6.1 percent as of the year ended March.

Nissan is targeting to sell 2 million passenger vehicles a year in China by 2017 to 2018, according to Seki. The company has said it expects deliveries in the country to climb to 1.43 million units this fiscal year, helped by the X-trail SUV, Teana sedan and low-cost cars under the Venucia brand.

The company will start production this year at a new plant in Dalian in northeast China. The factory will have an initial annual production capacity of 150,000 units, which can be expanded to 300,000 units.

To contact the reporters on this story: Ma Jie in Tokyo at jma124@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editors responsible for this story: Chua Kong Ho at kchua6@bloomberg.net Suresh Seshadri

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