Nissan Motor has shelved its plans to construct a new electric vehicle (EV) battery plant in Kitakyushu, southern Japan, marking a significant shift in the automaker’s electrification strategy as it grapples with deepening financial challenges.
Initially announced in January through an agreement with the Kitakyushu municipal government, the project was intended to produce lithium iron phosphate (LFP) batteries. These batteries, known for their cost-efficiency, were expected to reduce production costs by as much as 30 per cent compared to traditional lithium-ion batteries. The facility had been a cornerstone of Nissan’s efforts to enhance the affordability and competitiveness of its EV line-up.
However, the automaker has decided to abandon the initiative following an internal review of its EV-related investments. The cancellation comes as the company responds to sluggish sales across key international markets, most notably the United States and China, where declining demand has eroded its profitability.
Newly appointed Chief Executive Officer Ivan Espinosa, who assumed the role in April, has embarked on a corporate turnaround campaign, confronting mounting headwinds as the firm adjusts its global operations. The decision to pull back on battery production underscores the broader recalibration underway within Nissan’s EV roadmap.
The financial pressure on the company has intensified, with Nissan forecasting a staggering net loss of up to 750 billion yen (approximately RM21.94 million) for the fiscal year ending March 2025. This stands in stark contrast to a net profit of 426.6 billion yen recorded in the previous financial year. The anticipated loss is largely attributed to a major reassessment of asset values on the company’s balance sheet.
Industry analysts view the scrapping of the battery plant as more than a cost-cutting measure; it signals a reassessment of Nissan’s long-term ambitions in the increasingly crowded global EV landscape. As rivals surge ahead with large-scale electrification projects, Nissan now faces the challenge of repositioning itself without the Kitakyushu facility, once considered pivotal to its cost-saving and localisation strategies in battery supply.
The company’s next steps remain closely watched as Espinosa and his leadership team attempt to chart a new course in a volatile automotive market marked by rapid technological change and shifting consumer preferences.
