Nissan Altima Hybrid

For some time, Nissan Chief Executive Carlos Ghosn has maintained that hybrids are "not a good business story yet because the value is lower than their costs." That's why Nissan broke ranks from most automakers by not developing a hybrid program of its own. In September 2007, Japanese sources revealed that Nissan is reversing that direction, and will release a compact hybrid model--using its own technology--by 2010. That leaves a number of years for Nissan to decide exactly what it has in mind, but for the time being, the company is on track for a release of its first hybrid, the Nissan Altima in early 2007.

According to Ghosn, the introduction of a hybrid Altima is intended to help Nissan comply with fuel economy and emissions standards in states like California, not because he expects the hybrid model to make money or to fulfill any kind of corporate environmental goals. In fact, when the Altima first rolls out, it will be sold only in the eight states certified to meet California emissions requirements: California, New York, Massachusetts, Connecticut, Vermont, Rhode Island, Maine and New Jersey. These states also are among the strongest markets for hybrid vehicles.

To produce the Altima, Nissan is buying Toyota’s hybrid technology rather than developing its own. The second largest Japanese automaker will base the hybrid offering on its best-selling Altima, giving buyers another powertrain option on its popular model rather than creating an innovative new model. The September 2006 report indicated that Nissan will break ties with Toyota.

The redesigned 2007 Altima goes on sale in the fall of 2006, with the hybrid following in early 2007. Plans for the creation of the Altima Hybrid date back to 2002, when Nissan committed to producing 100,000 hybrid vehicles over five years using Toyota's transaxle, inverter, battery and control until with an engine developed by Nissan. The company will spend over $10 million to ready its Smyrna, Tennessee plan for the hybrid Altima assembly.

Instead of focusing primarily on fuel economy and reduced emissions, Nissan will try to match the performance and acceleration of non-hybrid models. “Most hybrids focus on smaller engines with environmental benefits like emitting cleaner exhaust fumes but Nissan’s hybrid will also have the same driver performance and speed as any Altima,” said Kyle Bazemore, Nissan communications senior manager.

The restrained rollout of the Altima Hybrid reflects Ghosn's skepticism over the viability of the hybrid as a solution. However, Nissan has stated that it has the capacity to manufacture up to 50,000 hybrids in the U.S.--much more than the expected demand in the eight states.