TOKYO -- Nissan Motor will switch all models sold in China to either electric or hybrid vehicles, Nikkei has learned, as the Japanese carmaker tries to keep pace with Beijing's push of automobiles with smaller carbon footprints.
The move follows an announcement this week that Beijing plans to make all new vehicles sold in 2035 "eco-friendly." Nissan will introduce nine models in China by 2025 that will either be fully electric or hybrid.
Japanese carmakers have lagged behind European and American peers in replacing gasoline-powered cars with greener alternatives, but regulation overseas has begun to nudge them into action.
Next year, Nissan will release a model equipped with its hybrid 'e-Power system' in China. In the next three years, the number of e-Power models will be increased to five or six, including its sedan Sylphy. The company also plans to launch a new electric model Ariya next year.
Nissan is expanding its production capacity in China. New plants will start operations in Changzhou, Jiangsu Province, this year, and in Wuhan, Hubei Province, next year. The facility expansion will boost production capacity by 30% to 2 million units.
The move comes as Beijing advances policy to promote eco-friendly cars. The Chinese government re-classified hybrid vehicles as "fuel-efficient vehicle," making it easier for automakers to meet production quotas.
As part of its drive to make all new vehicles released in 2035 environmentally friendly, half of the autos would be zero-emission vehicles and the other half would be gasoline-electric hybrid vehicles.
It will likely take about 10 years for electric vehicles to be as profitable as gasoline-powered vehicles due to high battery costs. As the expansion of cleaner vehicles is inevitable for sustaining growth in China, Beijing hopes to achieve the policy goal by promoting hybrids, which have better profit margins, as well.
Nissan currently plans to increase the sales ratio of electric vehicles in China from 2% in fiscal year 2018 to 23% by 2023, but the company could raise the goal further as it reviews sales strategy over the next five years.