Rebounding Mitsubishi will invest more than $10B in EVs, hybrids and batteries

TOKYO — Rebounding Mitsubishi Motors will invest more than $10 billion into electrified vehicles and battery production through 2030 as it expands its battery-powered lineup in advanced markets such as North America, partly by leaning on help from Nissan and Renault.

CEO Takao Kato unveiled the push Friday while announcing a new midterm plan.

The road map focused heavily on electrification but also included a global sales goal of 1.1 million vehicles for the fiscal year ending March 31, 2026.

That goal is up from an expected 866,000 units this fiscal year. But the target still does not quite build back to Mitsubishi's pre-pandemic worldwide volume of 1.127 million vehicles.

Kato's electrification plan calls for investing between 1.4 trillion and 1.8 trillion yen ($10.26 billion and $13.19 billion) in R&D and facilities for electrification through 2030.

That will partly fund the rollout of nine new electrified models — including battery-electrics, hybrids and plug-in hybrids — over the next five years. They will be part of a global rollout plan for 16 models overall, including traditional internal combustion vehicles.

"Under the new midterm plan, we will consistently make more investment in R&D and capital expenditure in response to the upcoming era of transformation," Kato said.

Among the electrified vehicles previewed by Kato were a full-electric pickup truck, a two-row all-electric SUV, a two-row hybrid SUV and hybrid versions of the Xpander and another MPV nameplate. It also envisions electrified versions of the Outlander Sport and Colt.

Also on tap: two EVs sourced from alliance partners Nissan and Renault. It didn't provide details.

Global expansion

Mitsubishi is the latest Japanese automaker to ramp up its electrification plans as this nation's carmakers race to catch up to global rivals by introducing models to tap burgeoning demand for EVs. Toyota, Nissan, Subaru and Mazda have all scaled up their EV ambitions in recent months.

Mitsubishi's investment will include $1.54 billion to secure 15 gigawatt-hours of annual battery supply in 2030. In that year, Mitsubishi wants to get half its global sales mix from EVs. Then, in 2035, Mitsubishi wants the entire lineup's mix to be electrified.

Mitsubishi's investment in electrification doesn't include funds for the Ampere EV subsidiary being spun off by French partner Renault. Kato said Mitsubishi is still weighing a possible investment in the venture, which already has a funding commitment from Nissan.

Mitsubishi's global expansion plan banks heavily on its regional strongholds in Southeast Asia and the Oceania region that includes Australia. It brands those regions as "growth drives" and predicts that overall volume will surge 42 percent in those markets through 2030.

Advanced markets including North America, Europe, Japan and China, by contrast, are considered regions where Mitsubishi can pioneer advanced technologies like electrification and explore new digital services, such as online sales. It sees sales advancing 20 percent by 2030.

In the U.S., Mitsubishi introduced an Outlander plug-in hybrid SUV last year. That is the brand's only electrified offering in the market right now. Mitsubishi's sales fell 16 percent to 85,810 vehicles in 2022, though the Outlander and Eclipse Cross notched gains.

Mitsubishi said it will sell the next-generation Outlander in Europe starting in 2024. The Outlander was the automaker’s best-selling model in Europe -- and Europe’s best-selling plug-in hybrid -- when the Japanese company decided in 2020 not to import the replacement model as part of a wider decision to wind down operations in Europe

North America challenge

For Mitsubishi, electrification in North America poses a challenge.

Under the Inflation Reduction Act passed by Congress last year, automakers are pressed to produce EVs locally and domestically source batteries in order to qualify for tax credits.

But Mitsubishi does not have any local production facilities. Its last assembly plant in the region, in Normal, Illinois, was eventually bought by startup Rivian and now makes full-electric pickup trucks.

Kato said Mitsubishi will likely have to lean on Nissan, which took a controlling 34 percent stake in Mitsubishi back in 2016 under then-Chairman Carlos Ghosn. There may also be a way for Mitsubishi's imported offerings to qualify under an allowance for commercial vehicles.

"We will discuss how to comply with IRA with our alliance partner Nissan," Kato said. "The interpretation of the IRA is difficult. We wonder whether it would be better to make a larger investment or whether to explore various possibilities, including through alliance with Nissan."

Among the EVs Mitsubishi plans is a full-electric pickup. But that model will be aimed at Mitsubishi's high-growth markets, where its Triton pickup is popular, such as Southeast Asia, Oceania, Latin America, the Middle East and Africa.

"I think there will be demand for battery-electric pickups. In the U.S., the Ford Lightning F-150 is quite popular. So, there will be such a trend," Kato said. "There is demand for environmentally friendly pickups with shorter driving range. So we would like to consider such possibility as well."

Naoto Okamura contributed to this report.