Nissan Motor Co. has put a pause on its previously announced plans to produce its first next-generation electric vehicles in the United States. This decision has resulted in a $500 million investment being put on hold at Nissan’s under utilised assembly plant in Canton, Mississippi.
According to a memo sent to suppliers by Nissan, the company has adjusted the development schedule of two planned battery-powered sedan models in order to enhance product competitiveness.
However, in the same memo, Nissan revealed that it will expand the number of battery-electric models produced at the Canton plant, adding a fifth vehicle – expected to be a compact crossover codenamed PZ1L, which would be the third electric utility vehicle planned for the factory.
Nissan has also decided to switch the production sequence, starting with two midsize electric crossovers instead of the originally planned sedans.
This production pause comes amid broader challenges faced by the auto industry in navigating the transition to electric vehicles. High price tags and a patchy public charging infrastructure have slowed consumer adoption of the new technology.
According to data from Cox, EV sales in the first quarter of this year rose only 2.6% year-over-year, significantly slower than the 46% year-over-year increase observed in the same period last year.
Nissan’s decision to pause production also coincides with the company rethinking its overall EV development and sourcing strategy. In its recently announced midterm business plan, Nissan stated that future EVs will be developed in families with integrated powertrains, utilising next-generation modular manufacturing, group sourcing, and battery innovations.
The company is also likely waiting to see the outcome of the upcoming U.S. presidential election in November, as a potential second Trump administration may roll back the Biden administration’s push for EV incentives.
The lack of visibility into Nissan’s EV production plans is concerning for suppliers who need to plan for new projects. More immediately, suppliers are worried about the dwindling vehicle output at the Canton plant, where Nissan currently builds three models. The factory was designed to produce 410,000 vehicles annually but had its capacity downsized to around 270,000 at the start of the decade.
With the full-size Titan pickup production ending this summer and the high-volume Altima sedan’s production being extended beyond the originally planned late 2025 end date, the plant’s future remains uncertain.