Nissan has decided to cancel its plans to establish a battery manufacturing facility in Fukuoka Prefecture, redirecting its resources and investments toward stabilizing the company’s financial situation.
Originally announced late last year, the Japanese automaker intended to invest ¥153 billion ($1 billion) in a new battery plant located in Kitakyushu city. The facility was set to produce lithium iron phosphate batteries, which are commonly utilized in electric vehicles (EVs). However, a spokesperson for Nissan confirmed on Friday that the project has been abandoned to enhance “investment efficiency” as the company seeks to improve its overall performance.
Nissan’s financial difficulties became evident in November when the company announced a reduction of 9,000 jobs and a 20% decrease in production capacity following a quarter in which first-half net sales fell by 94%. Shortly after, Nissan entered into an agreement with Honda to merge both brands under a single holding company, providing a potential pathway for recovery. Nevertheless, the partnership was formally dissolved in February due to disagreements over the power dynamics between the two companies.
A significant factor in Nissan’s struggles has been the lack of competitive EV models in its lineup, alongside a shortage of appealing hybrid options despite their rising popularity in the United States market. In response, Nissan is undertaking a comprehensive restructuring effort under the leadership of CEO Ivan Espinosa, who assumed his role in April with a mandate to revitalize the company.
In April, during the Shanghai Auto Show, Nissan announced a $1.4 billion investment in its operations in China. The company aims to leverage the highly competitive Chinese market to accelerate its EV development. Nissan is scheduled to release its full-year financial results for the fiscal year ending March 31 on Tuesday. Last month, the company projected a potential net loss of up to ¥750 billion, citing record annual deficits attributed to restructuring costs.
The decision to halt the Fukuoka battery plant is part of Nissan’s broader strategy to optimize its investments and focus on areas that will support the company’s recovery and long-term sustainability in the evolving automotive industry.
Source: The Japan Times
