Nissan has recently made a significant decision to abandon plans for a new EV battery plant in Japan as part of its efforts to turn the company around. The plant was expected to produce lithium iron phosphate (LFP) batteries, crucial for reducing EV battery costs and staying competitive in the market. However, Nissan is now focusing on aligning its strategy with market needs to restore its performance.
The Japanese automaker had received approval to build the new plant from the Ministry of Economy, Trade, and Industry (METI) in September last year. The facility was intended to support Nissan’s mini vehicles with LFP batteries starting in 2028, with an investment of over $1 billion. The government had also pledged support of up to 55.7 billion yen to help establish a domestic supply chain for the batteries.
Nissan’s decision to scrap the new plant comes at a critical time for the company, which is facing challenges in key markets like China and North America. Weaker sales have led to a net loss of 671 billion yen for the fiscal year ending March 2025. The new LFP plant was expected to help Nissan reduce EV battery costs by 20% to 30% and achieve an annual production capacity of up to 5 GWh.
Despite this setback, Nissan is gearing up to launch the next-generation LEAF in the US and Canada later this year. The updated EV will feature significant range improvements and a more crossover-like profile compared to its iconic hatch design. With a native NACS port for access to Tesla Superchargers, the new LEAF is expected to offer a driving range of 373 miles (600 km) according to Nissan’s vehicle programs chief, Francois Bailly.
In a bid to cut costs and improve efficiency, Nissan has announced plans to cut 20,000 jobs globally by fiscal year 2027 as part of its new recovery plan, “Re:Nissan.” The company aims to reduce costs by 250 billion yen and return to profitability by fiscal year 2026. As part of this plan, Nissan will close seven production plants, including one in Thailand, and consolidate global production plants from 17 to 10.
Despite these challenges, Nissan will continue to collaborate with partners like Mitsubishi, which plans to use the next-gen LEAF as a basis for a new EV in North America. The company’s decision to abandon the new EV battery plant underscores the competitive landscape in the EV market, with brands like BYD posing a significant threat to Japanese automakers in key regions. As Nissan navigates these challenges, the company’s ability to adapt to market needs and cut costs will be crucial for its future success.
