Nissan Cuts Petrol Car Output as EV Sales Surge in China

Japanese automaker Nissan has announced plans to scale back petrol car manufacturing while ramping up production of battery electric vehicles and plug-in hybrids. The company stated that it was caught off guard by the rapid acceleration of new energy vehicle sales in China amid an intense price war within the world's largest automotive market. Consequently, the manufacturer has reduced its annual global sales forecast due to ongoing difficulties in the region.

Ivan Espinosa, Nissan’s chief executive, described the market conditions as extremely harsh, noting that demand is weaker, competition is intensifying, and the transition toward alternative energy vehicles is happening much faster than anticipated. Recent figures show that sales across the country declined significantly over the first nine months of the year, driven largely by a vehicle lineup that relied too heavily on traditional internal combustion engines. In response, the company is adjusting its strategy by exporting certain products and focusing on newer electric and hybrid models.

Nissan scales back petrol vehicle manufacturing in China as electric and hybrid sales rapidly surge.

Meanwhile, the company reported stronger sales performance in North America and its domestic Japanese market. The slower transition to electric vehicles in those regions has been influenced by local policy decisions, such as adjustments to government incentives. This divergence highlights a broader dilemma for global manufacturers, who are attempting to maintain profits from conventional diesel and petrol cars while avoiding being left behind by emerging competitors.

In contrast to its push for electrification in Asia, Nissan has simultaneously lobbied to slow down regulatory mandates regarding zero-emission vehicles in Europe. The company has sought flexibility to continue selling petrol cars past certain target dates, despite rising demand for used electric vehicles in the UK. Furthermore, the carmaker faces additional regulatory hurdles regarding potential rules within the European Union that could exclude its current vehicle lineup from regional subsidies and incentives.

Why it matters

The strategic adjustments by major global carmakers reflect the intense pressures of transitioning away from traditional combustion engines while trying to compete with heavily subsidized rivals. These shifts directly impact international supply chains, production footprints in regions like the UK and Asia, and the availability of petrol versus electric vehicles for consumers worldwide.