Battery makers in the Japanese auto market are quite nervous, with concern that "Ghosn shock" may return in the wake of low-selling lithium-ion powered electric vehicles.

In 1999, Nissan chief Carlos Ghosn put the squeeze on steel materials suppliers, pressuring them to reduce prices as part of his corporate rehabilitation agenda. That's when the term "Ghosn shock" was invented, and it's believed to have triggered the steel industry's reorganization in Japan.

While Nissan has established a joint company with NEC Group producing lithium-ion batteries, the automaker wants to have access to lower prices from Hitachi. Nissan wants to add li-ion batteries produced by Hitachi to its next-generation, eco-friendly Altima and Pathfinder models, slated to be sold in the U.S. in 2013.

Lithium-ion battery manufacturers have been disappointed at the sluggish sales of electric vehicles because they expected to supply a huge amount of batteries to auto manufacturers. Now, the batteries are oversupplied and cutting into battery maker profits. For example, the Nissan Leaf sold little more than 20,000 units in 2011, only 40 percent of the company's stated goal.

Automakers had been limiting their battery suppliers, many times through jointly-owned ventures. Examples include Hitachi forming a partnership to supply li-ion batteries to General Motors for its hybrid cars, and Toyota working closely with Panasonic. Mitsubishi has a jointly owned company established with GS Yuasa Corp, but started to obtain batteries for low-priced models of electric vehicles from Toshiba Corp. Honda did the same – adopting Toshiba batteries for the Honda Fit EV.

The joint venture relationships offer benefits to automakers, such as product quality and specifications right for the car. The new priority for automakers, though, is price competition, and building more working relationships with more battery makers could mean cheaper batteries. Automakers know they need to bring down the MSRPs on electric vehicles and hybrids to increase the sales volume. Since li-ion batteries make up a big part of the production cost, battery makers are being pulled into a more competitive, tough market ... Ghosn style.


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    • 1 Second Ago
  • 11 Comments
      Rick
      • 2 Years Ago
      Japanese courts sided with Samsung a South Korean Company, Japanese normally hate South Koreans in the Samsung v Apple in the who has the best lawyers competition. Maybe another good reason not to buy a Nissan Leaf, and go for the Chevy Volt. Good to see Chevy doing better around the world with sales, its the better technology. Let hope the Volt screws the Japanese Prius sales as well in the US. Go Chevy Go...
      PR
      • 2 Years Ago
      "Nissan Motor Co. will adopt lithium-ion batteries produced by Hitachi, Ltd., a non-affiliated company, for two of its eco-friendly models--Altima and Pathfinder--to be marketed in the United States for 2013, Nissan officials have said." OK, I like to think I pay fairly good attention to what gets posted here on ABG. But what exactly is Nissan doing with lithium-ion batteries in the Altima and Pathfinder that will be for sale on car lots in the United States as soon as 4 months from now???
        Scambuster
        • 2 Years Ago
        @PR
        SUV Pathfinder going electric/hybrid?
        Dave R
        • 2 Years Ago
        @PR
        They will be using the Lithium batteries in the hybrid version of those cars.
      Giza Plateau
      • 2 Years Ago
      Aren't Japanese products so expensive that he will have buy outside of Japan anyway. That might also be a shock
      Spec
      • 2 Years Ago
      There is only so much you can squeeze. Enderel went bankrupt. A123 is near bankrupt.
      sirvixisvexed
      • 2 Years Ago
      I bet the people at the steel companies were all like "Ghosn shock is when your money ghosn ghosn ghosn goes!" ....except they couldn't have been because they don't speak english, and of course the same words don't rhyme :(. Hopefully, maybe, some of them still said it in a heavy Japanese accent as a joke to their English speaking business associates. Hopefully...
      • 2 Years Ago
      FTA: "For example, the Nissan Leaf sold little more than 20,000 units in 2011, only 40 percent of the company's stated goal." As of November 2011, Nissan sold 20,000: http://green.autoblog.com/2011/11/29/nissan-sells-20000-leafs-worldwide-10000-in-us/ As of August 2012, Nissan has sold more than 35,000: http://www.caribbeanbusinesspr.com/news03.php?nt_id=75581&ct_id=1&ct_name=1 Are you guys confused?
        SVX pearlie
        • 2 Years Ago
        zero, you're the one confused. Ghosn wanted to sell 50k Leaf in 2011, but only managed to sell 20k globally (40%). Year to date, claimed grand total series production is 35k Leaf, so maybe +15k Leaf sold 2012 globally. There is a very good chance that GM passes the Leaf global total this year.
        • 2 Years Ago
        zeroreality, the number of 35000 in your link is from start of model introduction 2010 until now. The article was saying that they haven't met their yearly sales number projection.