Due to concerns about quality and reliability, Nissan has decided to scrap its plan to build a lithium-iron phosphate (LFP) battery plant in Japan. The power was expected to play a crucial role in driving down the cost of EV batteries and keeping pace with industry leaders such as BYD.
Nissan scraps plan to build brand-new EV battery plant in Japan.
Nissan is racing to make a positive impression on its corporate stakeholders. Japanese automaker has abandoned plans to build a new plant in the country, originally intended to produce lithium iron phosphate (LFP) batteries.
As Nissan ponders a comeback, the automaker “is open to exploring all options” to boost its competitiveness. In a bid to drive growth, Nissan has signaled that it will press ahead with a plan for electric vehicle batteries “in line with market demands,” as part of its broader turnaround strategy.
Nissan has secured clearance to build a cutting-edge electric vehicle battery factory in Japan after obtaining approval from the Ministry of Economy, Trade, and Industry (METI) in September.
By 2028, Nissan plans to start equipping its compact cars with batteries as part of a more than $1 billion (153.3 billion yen) investment.
Nissan is set to receive up to ¥55.7 billion ($384 million) in government aid to support the construction of its domestic supply chain.
Nissan’s performance has been hampered by declining vehicle demand in crucial regions such as China and North America, a trend mirrored among other major Japanese automotive brands. The corporation anticipates publishing an internet loss of up to ¥750 billion ($5.2 billion) by the end of its fiscal year in March 2025.
Nissan’s newly constructed lithium-iron-phosphate (LFP) factory is poised to significantly reduce the automaker’s electric vehicle (EV) battery costs by a projected 20% to 30%. With an anticipated annual production capacity of up to 5 gigawatt-hours, this facility has the potential to make a meaningful impact on the company’s overall EV strategy.
Later this year, Nissan will debut its new-generation LEAF in both the United States and Canada. Unveiled in March as an upgraded electric vehicle (EV), Nissan touted the refreshed LEAF as offering “significant improvements.”
Nissan has traded its iconic hatchback design for a more contemporary crossover-inspired silhouette. The app also enables users to integrate their vehicle with local NACS ports that grant access to Tesla Supercharger stations.
Nissan’s head of vehicle packaging, Francois Bailly, has disclosed that the forthcoming Leaf is expected to boast a driving range of approximately 373 miles (600 km), based on WLTP estimates.
Electrek’s Take
While Nissan claims to prioritize market demand and cost reductions through its restructuring efforts, shutting down the lithium-ferro phosphate (LFP) battery plant may ultimately hinder progress over time.
As Chinese giant BYD and other major electric vehicle (EV) manufacturers steadily gain traction in key markets such as Southeast Asia, Central and South America, as well as select European regions, traditional players like Nissan and Toyota continue to dominate local sales.
BYD is making its presence known in Japan. China’s leading automaker is poised to debut its maiden mini electric vehicle (EV), a move expected to pose a significant threat to Japan’s dominant players in the kei automotive market next year.
Toyota’s President Koji Sato announced a review of the company’s plan to produce 1.5 million electric vehicles (EVs) by 2026, with Nissan making its own commitment just a day later.
