In a move that’s sending ripples through the global auto industry, Nissan has officially pulled the plug on its ambitious $1.1 billion electric vehicle (EV) battery plant in Kitakyushu, Japan. The decision, announced in May 2025, marks a major shift in Nissan’s domestic EV strategy and highlights the mounting pressures legacy automakers face as they navigate the fast-evolving electric mobility landscape.
Why Did Nissan Cancel the Kitakyushu Battery Plant?
Nissan’s planned factory was set to produce lithium iron phosphate (LFP) batteries, create around 500 jobs, and boost Japan’s domestic EV supply chain. The Japanese government had pledged up to ¥55.7 billion (about $370 million) in subsidies, and the plant was expected to begin operations by 2028 with a 5 GWh annual output.
However, under new CEO Ivan Espinosa, Nissan is undergoing a sweeping restructuring. Facing record net losses of up to $5.3 billion for the fiscal year, the company is slashing costs, cutting jobs, and reassessing all major investments. The battery plant, once seen as a cornerstone of the company’s electrification push, was deemed too risky in the current financial climate.
Nissan’s Restructuring: The Bigger Picture
The company’s decision is part of a broader turnaround plan that includes:
- Cutting 9,000 jobs worldwide and reducing global production capacity by 20%
- Closing select manufacturing plants
- Offering early retirement to several hundred employees in Japan (the first such move since 2007)
- Focusing on “investment efficiency” and immediate financial recovery.
Impact on Japan’s EV Ambitions
The cancellation is a setback for Japan’s goal to localize EV battery production and reduce reliance on imports. It also delays the creation of hundreds of jobs and slows the development of a robust domestic EV supply chain. For the company, it’s a clear signal that short-term survival is taking precedence over long-term expansion.
Nissan Kitakyushu Battery Plant: Key Facts
| Aspect | Details |
|---|---|
| Project Value | $1.1 billion (¥153.3 billion) |
| Location | Kitakyushu, Fukuoka Prefecture, Japan |
| Battery Type | Lithium Iron Phosphate (LFP) |
| Planned Capacity | 5 GWh per year |
| Jobs Created | ~500 |
| Government Subsidy | ¥55.7 billion ($370 million) |
| Status | Cancelled (May 2025) |
| Main Reason | Cost-cutting, restructuring, record losses |
Also Read: Ferrari’s First EV to Go on Sale October 2026
Frequently Asked Questions (FAQs)
Q1: Why did the company cancel the $1.1 billion EV battery plant?
The company cited investment efficiency and urgent cost-cutting as key reasons, following record financial losses and a company-wide restructuring.
Q2: What was the plant supposed to do?
It was planned to manufacture LFP batteries for EVs, supporting Japan’s domestic supply chain and creating 500 jobs.
Q3: How does this affect Japan’s EV industry?
The move delays Japan’s efforts to localize battery production and could slow the country’s EV transition.
Q4: Is Nissan exiting the EV battery business?
No, the company remains committed to EVs but is reassessing its approach, possibly relying more on partnerships or imports.
Q5: What’s next for the company?
The company will announce its full-year results and recovery roadmap soon, with further restructuring expected as it seeks to regain stability.
The company’s decision to cancel its $1.1 billion EV battery plant is a stark reminder of the challenges facing traditional automakers in the electric era. As the company pivots to survive, the entire industry will be watching to see how Nissan—and Japan—adapt to the new realities of global EV competition.
