According to a report in Automotive News, Nissan has decided to postpone its plans to produce the first next-generation electric cars in the U.S., resulting in a suspension of a $500 million investment in its Canton, Mississippi, plant.
In a memo sent to suppliers on May 17, Nissan stated that it had adjusted the “development timeline” for two electric sedans “in order to improve product competitiveness.” The company requested suppliers to halt all project-related activities for the electric sedan until further notice.
However, Nissan did not specify a new production date, mentioning only that it would provide an update to suppliers in mid-June. A supplier, speaking on condition of anonymity, estimated that Nissan might require another six to eight months before announcing new plans.
Originally, Nissan planned to commence production of the electric sedan in June 2026 but has postponed this plan twice. The previously announced schedule aimed for production to begin in November 2026.
In a recent interview with Automotive News, Jérémie Papin, Nissan’s chairman of the Americas, emphasized the company’s “pragmatic and proactive approach” towards consumer interest in electric vehicles. Papin stressed the importance of launching models when consumers truly demand them.
In the memo, Nissan disclosed its intention to expand the production of electric models at its Canton plant, aiming for a total of five models. GlobalData suggests that the fifth model, codenamed PZ1L, could potentially be a crossover similar in size to the Rogue Sport. Concurrently, Nissan plans to revise the sequence of EV production, prioritizing the construction of two crossover models before the sedan.
Sam Fiorani, vice president of AutoForecast Solutions, emphasized the significance of Nissan’s decision, stating, “Finding the right balance of EVs and launching the appropriate EV model at the optimal market juncture is pivotal to Nissan’s future success. This could be one of the most critical decisions in Nissan’s history.”
While deferring its plans for U.S. electric sedan production, Nissan is reassessing its EV development and sourcing strategy. As outlined in Nissan’s medium-term business plan unveiled in late March, forthcoming electric models will showcase “next-generation modular manufacturing,” collective purchasing, and battery advancements.
A supplier revealed that Nissan’s forthcoming EV models will leverage shared components to enhance cost efficiency. “They want us to utilize the same tools for producing parts across all EV models,” the supplier remarked, underscoring the necessity for Nissan to refine its product lineup to accommodate shared components.
Moreover, Nissan is closely monitoring the outcome of the U.S. presidential election in November. The potential reelection of former U.S. President Donald Trump could lead to the abandonment of EV incentives introduced by the Biden administration.
The uncertainty surrounding Nissan’s EV production plans is disconcerting for suppliers seeking to reallocate resources for new projects, noted Fiorani. He added, “These companies, irrespective of size, will hesitate to bid on a new vehicle project when they cannot ascertain its production feasibility.”
Papin assured that Nissan will soon provide clarity on its EV production strategies, emphasizing, “One of the forthcoming plans will be more advantageous for suppliers.” Papin highlighted that the integration of shared parts across multiple EV models will offer suppliers enhanced economies of scale and reduced business risk.
A pressing concern for Nissan and its suppliers revolves around the diminishing vehicle production levels at the Canton plant. Initially, Nissan aimed for an annual production of 410,000 vehicles at the Canton facility, which manufactures three models. However, in recent years, the plant’s annual capacity was reduced to approximately 270,000 vehicles.
Supplier reports evaluated by Automotive News indicate that in the fiscal year ending March 31, 2025, production at the plant is projected to decline by 17 percent, totaling 204,559 vehicles. Among the adjustments, the plant is set to cease production of the Titan full-size pickup truck model this summer. Additionally, plans were in place to halt production of the Altima sedan in the latter half of 2025, although the cessation of Altima production has been postponed.
Expressing concern, the aforementioned supplier remarked, “If production of the Altima cannot be sustained, Nissan’s supply base in the region could be jeopardized. With a reduced production volume, the company may resort to supplying Canton from other plants, leading to increased transportation costs for Nissan.”