LDN - Business

With new hybrid, Nissan offers cheaper route to electric cars

[February 01, 2017] By Naomi Tajitsu and Maki Shiraki

YOKOHAMA, Japan (Reuters) - Nissan Motor Co has taken a step back into gasoline hybrids with its Note e-Power model, which the Japanese automaker hopes will act as a gateway for drivers who will later shift to all-electric cars.

The move will also trim Nissan's costs.

Nissan's battery-electric Leaf, the industry's first mass-market, all-electric car launched in 2010, is the world's top-selling electric vehicle (EV), but sales have failed to reach initial targets. Globally, more than 250,000 Leaf cars have been sold.

With drivers yet to be fully won over by electric cars, Nissan hopes its new "near-electric" hybrid - which shares some parts with the Leaf - will allow it to shave costs and fend off competition in developing cheaper electric cars.

It's a reversal of sorts for Nissan. When it developed the Leaf, CEO Carlos Ghosn signaled Nissan would leapfrog gasoline-hybrid technology and go straight to battery-powered cars with zero emissions.

That has left it trailing rivals including Toyota Motor Corp in hybrids, a segment between gasoline-powered cars and EVs. Toyota has sold more than 9 million hybrids since it launched the Prius in 1997.

"We can't avoid the fact that EVs remain expensive compared with conventional gasoline vehicles, while there's also an ongoing assumption that EVs aren't suited to traveling long ranges," Hideyuki Sakamoto, a Nissan executive vice president, told Reuters.

For a graphic on the global electric vehicle market, click http://tmsnrt.rs/2kpOFLL

To view a graphic on types of electric vehicles, click http://tmsnrt.rs/2kQpVd5

SHARES PARTS

Late last year, Nissan launched the e-Note, a compact hatchback that uses the same motor as the Leaf. The Note operates like an EV, but instead of drawing its power from a large, costly battery, it uses a smaller battery that is charged by a gasoline engine.

The result is similar to General Motors' Chevrolet Volt, an electric car that resorts to its engine for charge when the battery is running low.

With a starting price of 1.77 million yen ($15,577), the e-Note, so far available only in Japan, is nearly 40 percent cheaper than the all-electric Leaf.

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A woman walks past a hybrid version of Nissan Note, which uses the carmaker's e-Power system, in the showroom at the carmaker's headquarters in Yokohama, Japan, January 13, 2017. REUTERS/Toru Hanai

Nissan says affordability is key to attracting drivers and eventually getting them to upgrade to pure electric cars.

Sakamoto said he hopes to eventually use the Note's new e-Power hybrid system for most of Nissan's hybrid offerings - helping lower production costs for both hybrids and EVs.

"Until now, components including the inverter and motor were different between our hybrids and EVs. But the new system is different in that it shares parts with the Leaf. This creates manufacturing efficiencies," he said, declining to give details.

HYBRID DETOUR

The e-Power system is Nissan's second foray into hybrids.

It launched its first in 2010, but with a limited range of hybrid models Nissan shipped just 95,000 such vehicles in the year to last March, a fraction of its total global sales of 5.4 million vehicles.

Nissan has said it is developing affordable, compact EVs for China, the world's biggest autos market, and may use a plug-in hybrid system developed by Mitsubishi Motors, in which it bought a controlling stake last year. It is also developing a fuel cell vehicle which runs on electric power generated from ethanol.

Tougher emissions regulations, particularly in China, promote battery-electric and plug-in hybrid cars over gasoline hybrids and conventional gasoline vehicles.

($1 = 113.6300 yen)

(Reporting by Naomi Tajitsu and Maki Shiraki; Editing by Ian Geoghegan and Martin Howell)

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