Why Nissan is abandoning the internal combustion engine in Europe

Nissan’s chief executive explained on Tuesday that his company had decided to move away from developing new internal combustion engines in Europe once a tougher set of emissions standards, known as Euro 7, would come into effect.

During an interview with CNBC’s “Squawk Box Europe,” Ashwani Gupta explained some of the reasons behind the planned change, a topic he’s addressed many times in the past.

One of the main reasons for this decision, said Gupta, was related to the competitiveness of ICE cars after the introduction of Euro 7, since new technologies would have to be used for these vehicles to comply with regulations. . Another factor to consider was whether customers would be willing to pay the cost of such technology.

According to the Brussels-based Transport & Environment campaign group, the Euro 7 standards are expected to be implemented in 2025. Based on Gupta’s comments, it appears that Nissan has made a decision on how the market will behave. will develop and European consumers will behave in the future.

“If the total cost of ownership of battery electric cars at Euro 7 is lower than the total cost of ownership of ICE cars,” he said, “[then] certainly, customers will opt for battery-powered cars. That’s why we decided not to develop ICE engines, starting [from] Euro 7, for Europe.”

Gupta was also keen to point out that the decision relates to the development of new ICE engines, rather than those already on the market.

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The remarks above echo comments made by Gupta during a Q&A session earlier today.

Nissan, he explained, thought customers would have to pay “a lot more” for an ICE car than an electrified car when Euro 7 was introduced. “It’s not us who decide, it is the customers who will say that the electric car is more valuable than [an] …ICE car.”

Away from Europe, Gupta said the Japanese car giant “will continue to manufacture ICE engines as long as it makes sense for the customer and for the business”.

Last November, Nissan said it would invest 2 trillion Japanese yen ($17.3 billion) over the next five years to accelerate the electrification of its product lineup.

The company said it will aim to roll out 23 new electrified models by 2030, 15 of which will be fully electric. It is aiming for a 50% electrification mix for its Nissan and Infiniti brands by the end of the decade.

Nissan is one of many well-known companies pursuing an electrification strategy. In March 2021, Volvo Cars said it planned to become a “fully electric car company” by 2030. Elsewhere, BMW Group said it wanted fully electric vehicles to make up at least 50% of its deliveries by 2030.

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These measures come at a time when the world’s major economies are trying to reduce the environmental footprint of transport.

The UK, for example, wants to stop the sale of new diesel and petrol cars and vans by 2030. It will, from 2035, require all new cars and vans to have zero tailpipe emissions.

Elsewhere, the European Commission, the EU exevsutive, aims for a 100% reduction in CO2 emissions from cars and vans by 2035.

On Tuesday, Nissan also announced operating profit of 191.3 billion yen, or about $1.65 billion, for the period from April to December 2021. Net profit reached 201.3 billion yen in during the first nine months of the financial year.

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