Nissan's Ivan Espinosa on Making Autonomous Driving Pay, Breaking Down Silos, and Knowing When to Step Down
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In this second part of an interview with journalist Hisao Inoue, Nissan CEO Ivan Espinosa covers several questions: how Nissan can turn its autonomous driving (AD) technology into a business, what the technology could mean for an aging Japan, why decision-making inside the company has sped up, and where the company stands on partnerships, including a possible capital tie-up with Honda. He closes with his view of his own role and his eventual exit. The interviewer's questions were asked in Japanese and are not in the transcript, so this article follows Espinosa's answers and describes the questions only where his responses make them clear.
Why AD should not trickle down from luxury models
Asked how Nissan will make money from autonomous driving, Espinosa starts with brand. Nissan has to change how it is positioned, he says, and the next step in the US is to present Nissan as a pioneer of technology that is "ahead but that is accessible."
He argues that the usual way of introducing new technology, launching it on top-end products and letting it trickle down, will not work for AD. His reason is demographics. In his view, the people most drawn to AD are young buyers, while high-end vehicles are mostly bought by older customers who have the income to afford them. Putting AD only on expensive models would therefore miss the people most likely to use it.
He uses Infiniti's QX80, which he puts at about $95,000, as the example. Nissan could offer the technology on that model and some people would buy it, but "the penetration rate will be very small." Nissan is instead discussing commercial schemes, such as a subscription or another deferred-payment arrangement, so that younger customers who want the technology but cannot pay for it upfront can still get it. He calls these customers "the heavy users." The goal is to make AD "as popular as possible," partly because wide adoption would also help the brand in the short term.
Speed before commoditization
Espinosa says the technology may become commoditized over time as many automakers start offering it, and that is why Nissan is pushing to move fast. He wants to use Nissan's current position as one of the industry's front-runners to change how people see the brand in the long run.
He sums up what the system needs to be in three words: cost-efficient, safe, and reliable. He adds that it should drive "just like you." The driver should never be surprised, should know exactly what the car is doing, and should feel comfortable while it drives.
Japan: robotaxis with Wayve and Uber, and the 90% "north star"
Espinosa says he believes Nissan is currently the strongest in Japan in this technology. That, he explains, is why the company moved quickly to make arrangements with Wayve and Uber. Robotaxi testing is expected by the end of this calendar year, starting in Tokyo.
He also points back to the vision Nissan announced in April, which included having 90% of the lineup offer the technology. He is careful about the wording: he would not call it a target but "more like a northstar." He says he does not know what the actual take-up among customers will be, but Nissan wants the technology to be available on 90% of its products.
Rural areas and older drivers
Espinosa says Japan's situation is very different from the US. Japan has an aging population, and public transportation in rural areas keeps shrinking. He sees autonomous technology as valuable to Japanese society in two ways.
The first is robotaxis. They could provide mobility "regardless of the time, to anybody anywhere": a person calls a car with their phone and goes where they need to. He also expects this to help local governments. He says he is sure they spend a large share of their budgets keeping bus lines running that do not have enough riders to be efficient, and robotaxis would make this much more efficient.
The second is support for people who still drive. Some people avoid driving because their eyesight is not what it was or because they lack confidence at certain times of day. He believes the technology would give them that confidence back and make driving safer for everyone, because it can assist the driver.
When the interviewer raised a point that Espinosa said he "completely agree[d]" with, he added that the technology should not be limited to EVs. Customer needs vary widely, Nissan has to stay flexible, and the technology will come to EVs "but not only." He repeated the aim of reaching up to 90% of product lines globally, and said each market has its own core users: in the US mainly young people, and in Japan probably the rural areas, where Nissan would need to work closely with government on public transportation needs.
Recovering Nissan's role as a pioneer
Espinosa ties AD to a broader idea of who Nissan is. Among Japanese automakers, he says, Nissan has always been the pioneer: the one that moves first and pulls the rest of the industry forward, creating new segments and inventing new concepts. "Very candidly," he says, he thinks the company "lost our way a little bit in the past few years" and needs to regain that role. He sees pushing the industry forward and showing what it can do as one of Nissan's responsibilities as a manufacturer. He wants to use the fact that Nissan is "a bit ahead" in this technology to restore that position.
Why decisions have gotten faster
Asked why the pace of reform has picked up, Espinosa first points to a shared goal. The goals of the Re:Nissan recovery plan, and now of the next mid-term plan, were built with the whole executive committee rather than coming from him alone, so the committee takes on the challenge together. He says, "very humbly," that this is the first time he has seen this level of cohesiveness on the executive committee. When one division struggles, others step in to help, instead of the unconstructive "what are you doing" responses he says were common before. In his view, this has dramatically changed how executives behave.
He also admits the change has not reached every level. Some layers of the organization still need to feel it, which takes time. That is the purpose of the company's culture-transformation work, especially with middle managers.
The obeya on variable costs
Espinosa's main example is the obeya ("big room") activity on variable costs. It brought together people from quality, manufacturing, design, product planning, engineering, and other functions to make Nissan's cars more cost-competitive, "without caring about who gets the credit for it. All get the credit for it as a team." According to him, participants began helping each other far more, removing silos and barriers and speeding up decisions. He says the whole organization learned a lot from the approach, and he wants to spread that mentality to "every single corner of the company."
The obeya also changed how Nissan deals with suppliers, which the interviewer had raised. Espinosa says Nissan used to come from an era in which it believed it knew better than its suppliers because it was the OEM. The message to teams now is the reverse: suppliers work with many automakers and "know much more than we do," so Nissan should ask for their feedback. That includes asking how Nissan can make development easier for them, cutting Nissan-specific requirements, and using off-the-shelf parts unless there is a real customer need or a specific concern. He says this makes car development more efficient for both Nissan and its partners, and that the company is now much more open. The mindset still needs to spread further through the teams.
Hierarchy, bad news, and the Monday meeting
On hierarchical corporate culture, Espinosa says he is not sure it is a Japanese problem specifically, since some companies everywhere work this way. His answer is openness. Management cannot fix problems it does not know about, and the only way to learn about them is to be "accessible and approachable" and to listen. When bad news comes up, management should help rather than react negatively, for example by suggesting an idea or connecting people with others in the company. Management has a much wider view than someone sitting in one department, he says, so its job is to give people tools and access to resources so they can solve problems. He calls this a big change in mentality that is still in progress.
He gives one concrete mechanism: the CEO weekly meeting, where the executive committee meets for 90 minutes every Monday. Executives bring topics that need a quick decision, and the group makes a fast call without full detail, along the lines of "this sounds fine, so let's go there." The decision is formalized once the documents are ready, but teams can start work right away. If views conflict or there is uncertainty, the meeting can quickly steer teams toward other alternatives. Espinosa says this avoids excessive document preparation, excessive nemawashi (informal consensus-building), and too many meetings, all of which slow things down. "We are a lot more practical now," he says.
Relations with the board
On the board of directors, Espinosa says the relationship has improved considerably since he took the role. Both sides have worked on transparency and on understanding each other's concerns, and management has tried to respond to what the board cares about. He says the quality and depth of discussion have improved as a result.
He says the relationship was already improving before the recent board changes, but it is now moving faster, for three reasons. First, the company is in better shape than a year ago, and he believes board members can see management making progress, which gives them more trust and confidence. Second, Nissan has a much clearer view of where it wants to go. Third, new board members bring fresh perspectives and backgrounds, which he says makes discussions richer.
Partnerships: strategy first, then partners
Espinosa expects the alliance relationships to keep evolving. He calls Renault one of Nissan's stronger partners and says it will remain so. There are projects already launching and others he cannot disclose yet. He mentions ongoing discussions with Renault, Mitsubishi, and Honda.
His main point is about order. The current environment requires automakers to be more open and flexible, but strategy has to come first. "It's not that the strategy should be built by the partner discussions," he says. Nissan should define its own plan, then ask who can help it get there, whether automakers or non-automakers such as Wayve and Uber, and what kind of collaboration fits. When asked about one further potential partner, he says he has been thinking about how they could collaborate, but repeats that strategy comes first. Any company that helps Nissan move faster, become more cost-competitive, and achieve its strategy is welcome.
On capital integration with Honda
Asked directly about a business integration with Honda, Espinosa says, "I don't know to be honest... many things can happen." He repeats a position he says he has stated publicly many times. Nissan is open to anything that meets three conditions: it creates more value for shareholders, it protects Nissan's identity, and it is meaningful and sustainable for employees.
He argues that capital integration does not create value by itself. An investment in a company adds nothing unless the partners build synergies and work together, and that can be done without combining capital, which he says is what Nissan is doing now, getting significant value from collaborative projects. He adds that this does not mean he opposes a capital integration. He is open to one if the three conditions are met and there is a real path to meaningful synergies. This applies to Honda and to any other company Nissan could create value with.
The mid-term plan
On whether he can deliver results, Espinosa says he is "determined and confident." He says Re:Nissan is on track. Work on what comes after it started last year, because employees, investors, and others kept asking what would follow the recovery. The April vision was meant to give a north star, and within that, Nissan is preparing a mid-term plan to be announced later this fiscal year. He expects it to build confidence among fans, customers, and capital markets.
Not becoming a "bad dictator"
Asked how he avoids becoming a bad autocrat, Espinosa says, "I will never be that," and that the company "doesn't deserve that." He says he tells executive committee members and others who work closely with him, half-jokingly, that if they ever see him behaving the way he shouldn't, they should tell him quickly so he can stop. "The company is much more important than any individual," he says, and adds that this is what he genuinely believes.
He also says preparing the next leader is a major part of his job. At the right time, he says, he will "let go" so that someone with fresh energy and new ideas can come in and "do a better job than I'm doing today." He calls this clear to him: "There's an end to my job. Unfortunately, as much as I like it and as much as I enjoy it, there needs to be a moment for me to step down," and he says that succession is already being prepared.
Asked at the end how he handles the stress, he says he does whatever he can: reading, playing tennis, anything that gives him a little time for himself. That helps him recharge and keep his mental health in balance. He adds that he enjoys the job very much.
And we're trying to find a way of making this as popular as possible because it can help us drive the brand image as well. In the short term, AD, I see it as a means to position Nissan as a pioneer of good, affordable technology.
From all the different areas working towards making our cars more cost competitive without caring about who gets the credit for it. All get the credit for it as a team. Remove the silos, remove the barriers, speed up decision making. And I think the whole organization learned a lot from this obeya approach. And this is what we want to expand. We want to bring this kind of mentality to every single corner of the company.
I will never be that. The company is much more important than any individual. This is the way I see things and the way I genuinely think. This is, for me, clear. There's an end to my job. Unfortunately, as much as I like it and as much as I enjoy it, there needs to be a moment for me to step down and bring fresh leaders and fresh view. And we are working on preparing that as well.
Okay.
Hindus.
Okay, very good questions. The first element is brand in Nissan. That's why we have to transform our brand positioning. That's why I was telling you that the next step in the US is positioning Nissan as a pioneering technology that is ahead but that is accessible. This is very important.
In the past, I think we have tried to start bringing technology from the top products and then trickling down. I don't think this will work in the case of AD, and I tell you why. When you look at the demographics of AD users, the people that are most attracted to AD technology are young buyers, not the older people. And when you look at how the buyers behave, normally the high-end products are bought by older people because they are more expensive and people need to have a certain level of income to access those products, right?
So it's important for us to take this in consideration because I believe the traditional approach of only offering this kind of technology in the very expensive product is not going to work. We need to have a very smart way of offering this kind of technology to people that also want to have it but probably don't have the initial means to pay it upfront, but by having some subscription model or some sort of scheme in which we can allow them to pay in a deferred way to get access to that technology because they are the heavy users. And this is what we're discussing now.
So this is a very important part of it. So it's brand, but also what will be the commercial scheme to use so that we can access these customers, because it's very easy to say, put it on the QX80 that is $95,000, and then people will buy it. But yeah, maybe they will buy it, but the penetration rate will be very small. And we're trying to find a way of making this as popular as possible because it can help us drive the brand image as well.
In the short term, AD, I see it as a means to position Nissan as a pioneer of good, affordable technology. That's why we want to move very fast. This is why we're pushing very quickly to bring this technology as quickly as possible. I think in the long run this technology might become commoditized because many OEMs might start offering it. That's why speed matters here. I want to move quickly because I want to show that Nissan is pioneering technology, and we can take advantage of being one of the frontrunners today in the industry with this technology to change the perception of our brand in the long run.
It's really about having something that is very cost efficient and that is very safe and reliable. So these are the three key words for me in terms of AD: cost efficient, safe and reliable. It should be a system that is driving just like you. You don't need to be surprised. You need to know exactly what the car is doing, and you need to be very comfortable when the car is driving for yourself. This is, for me, the key areas that we have to focus on to position that technology in Nissan.
I think we're the strongest in Japan in terms of this technology at the moment. And this is why we moved very quickly with Wayve. We moved very quickly with Uber to make these arrangements, and we will see robotaxi testing already by the end of this calendar year. We will start in Tokyo. We signed this deal and we announced it with Uber and Wayve. So we're moving at a very fast speed there in Nissan.
And this is exactly what we want to achieve. If you remember in our vision announcement, we gave, I wouldn't say a target, but it's more like a north star of having 90% of our lineup offering this technology. This is what we want to do. I don't know exactly what the penetration rate will be, but we want to make sure that 90% of our products have the technology accessible to customers.
In Japan, it's very different than in the US. In Japan we have an aging population. We have this phenomenon in which we are having less and less public transportation in the rural areas. And this is one of the great things and great values that our autonomous technology can bring to Japanese society.
On one end, with robotaxi we can provide mobility regardless of the time to anybody, anywhere. You just use your mobile, you call a car, and you can go anywhere you need. So this will help a lot of people that don't have the means of transportation. It will also support the local communities to provide mobility because today I'm sure they are spending a big part of their budgets on trying to keep certain bus lines running, and it's not very efficient because they don't have enough users and so on. So this will make it much more efficient for the local governments.
And then on top, you bring that this technology will allow drivers that will normally refrain from driving because maybe their eyesight is not as good as it was a few years ago. They don't feel so confident to drive at a certain time of the day or so on, and this technology will give them that confidence. And it will be safer also for everyone because the technology will be there and can support the drivers as well. So I think this is a great value that we can bring to Japanese society and Japanese communities with this technology.
I think this is the positioning of Nissan. If you take a step back, we have always been exactly this. We have always been, within the Japanese OEMs, like the pioneer, the one that moves first, the one that is in a way pulling the rest of the industry forward. I think, very candidly, we lost our way a little bit in the past few years, and we need to regain that because I think this is one of the key roles that Nissan has in the Japanese automotive industry.
This is, I believe, the role of Nissan: pushing the industry forward and showing what we can actually do as an industry and making sure that the industry is pushing and moving. And I firmly think this is one of the roles that we have as a manufacturer. It's part of what we have done in the past. Nissan has always been a pioneer in new segments, inventing new concepts, and I think we need to bring that back, and this is a great opportunity to do so. I want to take advantage of this technology and the fact that we are a bit ahead to reignite the positioning of Nissan in the Japanese industry. Yeah.
Foreign.
Yes, I completely agree. At the same time, we don't want to limit the technology to EV only. I think this will be a mistake because still there's so many different choices and so many different needs from customers that we need to remain a bit more flexible. That's why this technology will be available, of course, on EVs, but not only. We want this technology, as I said, to be present in as much as 90% of our different product lines globally, of course.
And there's very specific, unique users depending on the markets that we have to cater to. As I was saying, in the US it's more the young. In Japan it's probably, as you said, the rural areas and making sure that we can collaborate with the government properly to support the public transportation requirements. So there's a lot of interesting areas to develop the business moving forward, and that's what we're doing actually.
Well, I think there's many things. First, we have a clear goal as a team. We set down the goals of Re:Nissan, and we're doing the same thing for the midterm plan. It's not something that is coming from me only. It's something that is built with the rest of the executive committee. And as such, we all embrace the challenge together. So you see a lot more enterprise thinking versus what we had before.
It's, for me, and I say it very humbly, it's the first time I see such a strong cohesiveness in the EC, an EC that is really working towards the same goal and working hand in hand with each other and helping each other. And I think this is helping with the speed because if some of the divisions is having difficulties, the other division comes in and helps instead of just letting them, "Oh, what are you doing?" or these kind of behaviors that were not constructive. It's more like hand in hand, "How can we help?" because we all have the same goal. And this, I think, has really dramatically changed the way the executives are behaving.
There's still a lot of work to be done. I think in certain layers of the organization we feel this. Still, we need to have this come down to all the different levels of the organization. It takes time. It's a lot of the work that we're doing on culture transformation and on showing all the middle managers that we all need to work together towards one goal.
I think we learned, and the team learned a lot, through the obeya activity that we had on variable costs, where all these functions, we had people from so many different functions ranging from quality, manufacturing, design, product planning, engineering, from all the different areas working towards making our cars more cost competitive without caring about who gets the credit for it. All get the credit for it as a team, and this really changed the way they were working.
So they started to help each other a lot more, remove the silos, remove the barriers, speed up decision making. And I think the whole organization learned a lot from this obeya approach, and this is what we want to expand. We want to bring this kind of mentality to every single corner of the company.
That's correct. We are exactly, and we have a lot more open dialogue with business partners, as you said. With obeya, a lot of the mindset changes that we gave the teams is we were coming from an era in which Nissan thought we knew better than our business partners or the suppliers because we are the OEM. I told them, "No, these guys are working with so many OEMs. They know much more than we do as an OEM, so let's open up and get their feedback and learn from our business partners how can we make our development easier for them to be more cost competitive, or take off-the-shelf parts, reduce the unique requirements that we have."
If there's no need, if there's no unique customer requirement or unique things that we are anxious about, let's just take off-the-shelf parts so that we make the way of creating cars much more efficient for us as an OEM and also for our business partners. So all this mentality has changed, and I believe we are a much more open company now. And this mindset we need to continue putting down the teams. Yeah. No thank.
I don't know if it's Japanese companies only. I think some companies have this hierarchical approach, and the way we are trying to break this is just to be open, because as management we cannot fix the problems if we don't know the problems. And the only way of knowing the problems is for you to be accessible and approachable and listen to people, and instead of reacting negatively to bad news, actually helping them, saying, "Yeah, okay, I understand this is the bad news, so I have this idea. Let's talk to these other people," because as management you have a much wider view than what one individual sitting in a certain department has.
So our role as management is to provide them the tools and provide them the access to all the resources in the company so that they can solve the problems, and this is what we're doing. So this is a big mentality change that we have as a management team now.
It's still happening. We have what we call a CEO weekly meeting where all the EC gathers for 90 minutes every Monday, and whenever there's a quick decision to be made, people here, the other EC members, bring topics if they need some, and we make a very quick judgment without having the detail. And we just say, "Okay, this sounds fine, so let's go there," and then we will formalize the decision once the documents are ready, but they can start moving.
So this provides a lot of speed and a lot of guidance and reduces a lot of waste, because if there's opposed views or we are not certain, maybe we better not do that and focus on these other alternatives. So we very quickly can provide guidance without the need for excessive preparation of documents or excessive nemawashi and excessive meetings that make things very slow. So we are a lot more practical now.
Well, I think since I started working with the board in my role, the relationship with them has improved a lot. We worked a lot on having more transparency, on getting closer to each other, on trying to have a better understanding of concerns of the board as well as the concerns of management. Also, management, we try to be very reactive to what the board cares about. So we improved a lot the discussion, I would say the quality of the discussions and also the depth of the discussions, by understanding each other better.
I see the relationship has improved a lot. We have, as you said, new members coming in, and this is even making the relationship better. So I would say the relationship has been improving before the changes, but it's now taking a lot better speed and a lot better dynamic because, I think, several factors.
One is the context of the company is better than one year ago. We see progress, and the board members, I believe, feel the management knows what we are doing and we are showing the progress. So the board members, I would say, have more trust and confidence in what we're doing. Second, we have a much clearer view of where we want to go as a company, and this is also helping discussions in the board. And third, we are bringing now new members that have fresh perspectives. So the quality and the level of the discussions is also improving because of this. So we have a lot richer discussions now with these new backgrounds that we have added to the board. Yeah.
Well, I think the relationship will continue evolving, including Renault, because Renault, as I was saying earlier, is one of our stronger partners and will continue to be. We are working hand in hand with them, and we have many projects which we are already launching and some others that we are working on that I cannot share today. But there's many things that we are discussing with our partner Renault, with Mitsubishi, and as well as with Honda.
So I believe the world in which we are operating today in Nissan asks OEMs to be more open and to be more flexible, to understand what your priorities are as a company. Set your strategy first and then understand which partners can help you achieve your strategy. It's not that the strategy should be built by the partner discussions. This is not the way. The way is to be clear about what is Nissan's strategy first. This is our plan. This is what we want to achieve. Okay, then who can help us, whether from OEM or from non-OEM world? Who can we collaborate with, and what kind of schemes of collaboration should we build?
So this is how we will continue moving around partnerships, including the companies that we mentioned: Honda, Mitsubishi, Renault and others that might be there, as well as non-OEM companies like Wayve, Uber and maybe others that we will need some support from in order to achieve our strategy in a quicker and more value-creating way. Yeah, this is the approach in Nissan to partnerships.
Could be. At the moment, I've been thinking how could we collaborate with them. But again, as I said, the strategy comes first, and then we will see which partner can help us reach quicker and more value-creating way to achieve our strategy. But yeah, I'm open to any company. Any company that helps us be quicker, have a better cost competitiveness and achieve our strategy in a better way is more than welcome to work with Nissan. Of course.
I don't know, to be honest. I don't know. Many things can happen. As I said, and I've said that publicly before many times, I will always be open, and Nissan will always be open, to do things that will create more value for our shareholders, will continue to have the identity of Nissan protected, and will be something that is meaningful and sustainable for our employees. So, as long as these three things are satisfied, I'm open to do many things, because the world is very complicated. And we could be open to partner with Honda or partner with others.
Again, capital integration doesn't necessarily add value. What adds value is what you do with it. The fact that somebody invests in a company will not create any value unless you synergize and you start working together with this partner, right? And you can do that without integrating on capital, by the way, which is what we're doing. So we're extracting a lot of value on synergies and projects by collaborating with companies without the need to do a capital integration.
Now, that doesn't mean I'm against doing a capital integration. I'm open as long as these three things that I mentioned are protected and we see a real way of making meaningful synergies forward. And this applies not only to Honda, applies to anybody that we can collaborate with and create value with. Yeah.
Okay.
Well, I'm determined and I'm confident to deliver what we said we will deliver. So far, as we said, Re:Nissan is on track, and we will continue delivering Re:Nissan. And we already started to work several months ago, since actually last year, on what comes after Re:Nissan, because many of our employees, investors and others were asking, okay, your revival is coming through, but what comes after? And that's why we announced vision in April, just to give a north star of where we want to go.
And within this north star, we are now working on the midterm plan that we will be announcing later on this fiscal year. And I'm sure this will bring more confidence to general fans, audience, customers, and also the capital markets, of what we are doing as a company. I'm confident and I'm determined to continue improving the future for Nissan in OSA.
I agree with you, and I will never be that. I think the company doesn't deserve that. And this is a bit in between jokes what I'm always telling the EC members or anybody that's working closely with me: whenever you see that I'm behaving the way I shouldn't, please tell me quickly. Quickly, yeah, because we have to stop that. The company goes before myself as a leader. The company is much more important than any individual. This is the way I see things and the way I genuinely think in Osan.
So there will be a time for me. I will do my best during the time that I am leading the company. But I'm also responsible to prepare the next leader, and this is also a big part of my job, so that at the right time I would let go, and somebody fresh with a new engine and new power and new ideas will come and do a better job than I'm doing today. So this is, for me, clear: there's an end to my job. Unfortunately, as much as I like it and as much as I enjoy it, there needs to be a moment for me to step down and bring fresh leaders and a fresh view. And we are working on preparing that as well.
Yes, I can do so many things, but yes.
No, yeah, I'm doing anything I can to manage the stress. Reading and playing some tennis or anything helps. So as long as I have a little bit of time for me, it's enough. Yeah. And it helps me refresh and get ready for more and more. So I try to keep my mental health in balance.
I enjoy very much. Thank you so much.
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