Nissan faces battery plant cuts as electric car hopes fade

PARIS, Sept 15 (Reuters): Nissan  boss Carlos Ghosn is preparing to cut battery manufacturing, people familiar with the matter said, in a new reversal on electric cars that has reopened deep divisions with alliance partner Renault.
The plan, which faces stiff resistance within the Japanese carmaker, would see US and British production phased out and a reduced output of next-generation batteries concentrated at its domestic plant, two alliance sources told Reuters.
In what may also prove a politically sensitive blow to Japan Inc., Nissan would follow Renault by taking cheaper batteries from South Korea's LG Chem  for some future vehicles, including models made in China.
"We set out to be a leader in battery manufacturing but it turned out to be less competitive than we'd wanted," said one executive on condition of anonymity. "We're still between six months and a year behind LG in price-performance terms." A decision on the Nissan battery plants in Sunderland, England, and Smyrna, Tennessee, is due next month, the sources said, following a tense procurement review with 43.4 per cent shareholder Renault, the smaller but senior partner in their 15-year-old alliance.
"Renault would clearly prefer to go further down the LG sourcing route, and the Nissan engineers would obviously prefer to stay in-house," another insider said. "The write-off costs are potentially huge."
Renault-Nissan "remains 100-per cent committed to its industry-leading electric vehicle program" and has no plans to write down battery investments, spokeswoman Rachel Konrad said.