Nissan and China’s Dongfeng Motor Corporation (DFM) entered into a new partnership for developing pure electric vehicles (EVs) for the Chinese market. The new EV will be approximately 30% cheaper than Nissan’s current EV and will be available since this summer at the soonest.

Nisssan’s LEAF is one of the world’s best-selling EV brands. In order to increase its penetration in the Chinese market, Nissan cooperated with DMF in 2014 and introduce an EV product “Venucia e30”, which was designed and manufactured on basis of LEAF. Nissan and DMF announced to work together again and aims to introduce a new EV that will be 20~30% cheaper than e30 by this year. The new EV will be priced at approximately RMB 200,000 without subsidy.

A Nikkei report pointed out that Nissan new, low-cost EV will reduce costs by purchasing core components such as EV-use lithium-ion batteries from Chinese suppliers. By sourcing from local supply chain, Nissan’s new EV will be cost-competitive with EVs domestically made by Chinese manufacturers. Nissan aims to increase its market share in China from 2% in 2015 to 5~10% in following years.

The Beijing government and some local governments have introduced incentives for purchasing EVs and PHEVs. By combing the at-most RMB 55,000 subsidy and local subsidies, a new EV/PHEV buyer can receive a subsidy of up to RMB110,000. Accordingly, Nissan’s new EVs can be sold at price ranging from RMB 100,000 to RMB 150,000, which is near to gasoline cars of the same level.

China’s incentive policy has been successfully boosting sales of EVs/PHEVs. It is expected to see a rapid growth of the numbers of EVs/PHEVs from 330,000 in 2015 to 5 million in 2020.

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