Recently Nissan received loans from the federal government.  The loans were intended to spark advanced technology vehicles and to provide the company with the needed money to rebuild and retool manufacturing facilities to ready for the advanced vehicles of tomorrow.

Nissan intends to use $1.6 billion of the loans it received from the government to retool the plant in Smyrna, Tennessee.  The retool is not simply designed to make EVs in the future.  Nissan has decided to build the plant in a way that makes it capable of building several different types of cars on one assembly line.  The goal for Nissan is flexibility.  Without knowing what type of technology will power the vehicles of tomorrow, Nissan wants to be prepared for anything and everything.

Additionally, Nissan does not want to waste any line capacity by focusing only on EVs.  EV demand may be low for years to come and would not fully utilize the capacity of the line.  Therefore, they will build hybrids on the line when EV demand is low, and decrease hybrid production if EV sales and demand raise.  Nissan plans to slowly phase in EV production in the next few years.  They anticipate EV sales around 7,500 units from 2011 to 2013, and up to 150,000 units at some point soon.  For now, plug-in and other hybrid models will make up the bulk share of vehicles coming off of the retooled line.

Nissan is making a smart move by making the line flexible.  According to the managing director of Intelligence Automotive Asia, LTD, "There is a risk that the plant may struggle to reach full capacity quickly.  A lot will depend on the price and affordability of the car (EV) and experience of initial users."

The flexible line will allow Nissan to immediately follow any changes in demand for advanced technology vehicles.  Many predict that if gas prices stay low, the demand for many of these vehicles will also be low.  But any immediate spike in gas prices could quickly cause a rush of EVs and plug-in hybrids.  Nissan is ready for changing demand with the retooling of their plant in Tennessee.  The government loan was well spent and Nissan has positioned themselves to take a leading role in the future of advanced technology vehicles.

Source: Bloomberg