Ghosn Forecasts Growing Weather Calamities to Drive EV Sales

Ghosn Forecasts Growing Weather Calamities to Drive EV Sales

If countries cannot agree on how to reduce rising global temperatures, "expect to see much more disasters," Nissan’s CEO says.

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2011 Tokyo
Motor Show

TOKYO – Nissan CEO Carlos Ghosn, long bullish on electric vehicles, says growing weather-related calamities will drive more consumers into buying zero-emission vehicles.

If countries cannot agree on how to reduce rising global temperatures, "expect to see much more disasters, Ghosn tells media during a roundtable discussion at the auto show here.

“And expect to see the public, every time there is an environmental disaster, say, 'This is due to global warming.'"

Nissan retails the Leaf electric car in the U.S., Europe and Japan, and Ghosn says to look for those major markets, plus China, to continue to account for the majority of EV sales.

"China will become very serious on electric cars," he says, noting Nissan currently has the capacity to meet EV demand only in developed, not emerging, markets. Leaf sales launch in China in 2012.

Still, Ghosn predicts internal-combustion-powered vehicles will continue to dominate the global markets, forecasting an 80% take rate in 10 years, from roughly 99% today. EVs will hold a 10% share in 10 years, with partial-zero-emissions models, such as hybrids, making up the rest.

Ghosn criticizes the strong yen and the Japanese government's inability to effectively weaken the currency, which currently is trading at ¥78:$1.

An exchange rate of ¥110:$1 is optimal for the domestic auto makers, but even at ¥100:$1 vehicle exports could still be "extremely competitive."

Nissan "absolutely" wants to continue to using Japan as an export base, he insists, but when "you're neck to neck with the Koreans or the Americans, we can't compete."

More than 50% of the cars the auto maker builds in Japan are exported, and there is "practically no profitability" in doing so.

The recent run-up in the yen does not make sense, given the stagnant Japanese economy, Ghosn says, suggesting there is something "artificial" about the currency's level.

He points to Switzerland, a country less populated than Japan and with fewer natural resources, as a benchmark.

In September, the Swiss franc was capped at SF1:E120, a level that promotes exporting and improves the profitability of doing business in the Western European nations.

The Japanese auto industry employs 4 milllion-5 million workers, and for this reason the rising yen must be dealt with soon or jobs will be lost, Ghosn contends.

Nissan already has announced production shifts from Japan to other countries, notably the Rogue cross/utility from Japan to Smyrna, TN, in 2013.

Ghosn's remarks are at odds with those of Toyota CEO Akio Toyoda, whose nationalistic speech earlier today made clear the No.1 auto maker is not looking at shifting production away from Japan.

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