Euro 7 not worth it for Nissan

NISSAN chief operating officer Ashwani Gupta says the Japanese manufacturer will no longer develop internal combustion engines (ICE) for the European market, in anticipation of the introduction of game-changing Euro 7 emissions standards.

Speaking at the announcement of Nissan’s third quarter financial results for the 2021 fiscal year last week, Mr Gupta said: “Nissan has decided not to do ICE engines in Europe from Euro 7, but will continue to do ICE engines as far as it makes sense for the customer and for the business.”

In Europe, Euro 7 emissions standards are on track to come into effect as soon as 2025 and the Yokohama-based company believes the impending regulations will raise the cost of developing ICE-powered vehicles for that market to unsustainable levels.

“We’ve decided we won’t develop the ICE engine for the European market, because at the time of Euro 7, we believe customers will have to pay much more for an ICE car than an electrified car,” said Mr Gupta.

“It's not us who is deciding this; customers will say the electric car has more value than an ICE car.”

However, Nissan will continue development of its petrol engines for markets where it expects demand for ICE vehicles to remain high, such as in North America, where such motors were integral to the brand’s commercial and SUV models.

“We have customers and markets who have aspirations of different kind of powertrains, and we have to follow them because we are here for customers,” said Mr Gupta.

“We launched the Z (sportscar) with the VR30 twin-turbo engine, with all-new nine-speed auto and six-speed manual transmission and, very recently, for the all-new Rogue (X-Trail SUV) in the United States, we launched a 1.5-litre variable compression twin-turbo engine, so we are not going to stop our ICE engines in these markets where customer exists and from the business viewpoint it makes sense.” 

However, Nikkei Asia reported that the development of ICE engines for models earmarked for the European market was only the beginning of Nissan’s strategic shift to an electrified-vehicle line-up.

Renault, Nissan and Mitsubishi all recently announced that they would jointly invest €23 billion ($A36.6 billion) over the next five years in support of the tripartite alliance’s electrification programme.

The publication reported that Nissan would end development of ICE in all its major markets – except the US – and focus its resources on electric vehicles and that it was “the first major Japanese automaker to make such a break.”

Nissan is reportedly phasing out development of petrol engines for the Chinese and Japanese markets, but will continue to develop engines for hybrid vehicles.

Having invested about ¥500 billion ($A6 billion) a year on research and development, with most of that investment going toward petrol engines and the vehicles they power, Nissan will now redirect those funds to EVs and other new technology.

Meanwhile, Nissan will look to improve existing engine designs rather than develop new ones. Plants that produce ICE “will remain open, and no job cuts are planned at this stage”, sources told Nikkei Asia.

However, personnel involved in petrol-engine development and production will gradually be redeployed to EV motors, hybrid engines and other divisions.

Last week, Nissan reported an operating profit of ¥191.3 billion ($A2.3 billion) for the period between April and December 2021. The company’s net income was ¥201.3 billion ($A2.4 billion) in the first nine months of the fiscal year.