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Nissan Motor has unexpectedly scrapped plans to build an electric vehicle battery plant on the island of Kyushu, Japan. The $1.1 billion project, which was supposed to be a major investment in the country’s domestic market, has now been officially canceled, citing a lower than expected investment performance.
The plant was to be located in Kitakyushu, Fukuoka Prefecture, and would specialize in producing lithium iron phosphate (LFP) batteries. It was expected to create about 500 new jobs and was not expected to open until July 2028. It was expected to have an annual capacity of 5 gigawatt hours. The government supported the project by providing up to 55.7 billion yen in subsidies to encourage the development of environmentally friendly technologies.
However, on May 9, Nissan officially announced the cancellation of construction. The company said the decision was made after a “thorough analysis of investment efficiency.” At the same time, it signals a new strategic line for Nissan – restraining expansion in the domestic market in favor of restructuring and improving efficiency.
In addition to the cancellation of the infrastructure project, Nissan announced plans to reduce several hundred employees in Japan by introducing an early retirement program. This will be the first time the country has reduced its workforce in 18 years – the last time such an initiative took place was in 2007, when 1,500 people were laid off due to a drop in production.
Starting from the current fiscal year, Nissan will begin accepting applications for early retirement from employees in internal administrative departments. In total, as part of the global restructuring, the company plans to cut 9,000 jobs and reduce production capacity by 20%.
The abandonment of a large-scale project and staff reductions indicate deeper internal transformations at Nissan, which are aimed at optimizing the company's business model and adapting to new challenges in the electric vehicle market.
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