Nissan Motor Co. has halted its $1.1 billion plan to construct an electric vehicle (EV) battery plant in Kitakyushu, Japan, as the company shifts focus to financial recovery amid a projected record net loss. Announced on May 9, 2025, this decision underscores Nissan’s broader restructuring strategy under new CEO Ivan Espinosa, impacting its EV production goals during a pivotal moment for the industry, reports Reuters.

Details Behind the Canceled Kitakyushu Plant

Nissan revealed the lithium iron phosphate (LFP) battery plant in January 2025, targeting a 5 gigawatt-hour annual production capacity by July 2028. Located in Kitakyushu, Fukuoka Prefecture on Japan’s Kyushu island, the facility was expected to cover 150,000 square meters (1.6 million square feet) and create 500 jobs with an investment of 153.3 billion yen ($1.05–$1.1 billion). The Japanese government had pledged up to 55.7 billion yen ($384 million) in subsidies to support the project. However, Nissan canceled the plan, stating, “After careful consideration of (the) investment efficiency, we have decided to cancel the construction of a new LFP battery plant in Kitakyushu City, Fukuoka Prefecture.” This move reflects the company’s response to a projected net loss of 700–750 billion yen ($4.8–$5.2 billion) for the fiscal year ending March 2025, driven by significant asset write-downs and restructuring costs.

How This Affects Nissan’s EV Plans

The Kitakyushu plant was set to produce LFP batteries, which are valued for their lower production costs and could have cut Nissan’s EV battery expenses by 20–30%. These batteries were intended for mini EVs, including the next-generation Nissan LEAF, which is slated for release later in 2025 in the U.S. and Canada with an estimated range of 373 miles (600 km, WLTP). Canceling the plant may force Nissan to rely more on external suppliers like Envision AESC or CATL, potentially increasing costs and delaying its competitiveness against cost leaders like BYD, which is gaining ground in markets like Southeast Asia and L'Europe.

Nissan’s Wider Restructuring Strategy

Led by CEO Ivan Espinosa since April 2025, Nissan is undertaking significant changes to stabilize its finances. The company plans to reduce its global workforce by 9,000 jobs and cut production capacity by 20%, while also offering early retirement to several hundred administrative staff in Japan—the first such reduction there in 18 years. Nissan’s global sales fell 4.3% in the fiscal year ending March 2025, with a notable 11.5% drop in Japan to 52,403 units in March alone. Declining demand in key markets like Chine and North America has prompted Nissan to scale back domestic investments as part of its recovery efforts.

What This Means for the EV Industry

Nissan’s decision highlights challenges facing Japanese automakers as they compete in the global EV market. Competitors like BYD are expanding aggressively, with plans to launch a mini EV in Japan in 2026, posing a direct threat to Nissan’s market share. The canceled plant could slow Nissan’s progress in reducing EV costs and improving range, potentially affecting EV owners and enthusiasts looking for more affordable options. Meanwhile, Nissan may redirect resources toward alternative technologies, such as solid-state batteries, to regain its competitive edge in the long term.