Nissan Motor is scrapping plans to build a $1.1bn EV battery plant in Kyushu, Japan

Nissan Motors announced last week that it was cancelling plans for a purpose-built EV factory that was expected to cost approximately 153bn yen ($1.1bn).  

The plant was to be located in Kitakyushi, Kyushu, Japan, and across its construction and lifespan was expected to generate 500 internal jobs. The proposed plant was planned to be developed with support from local government; information on the Japanese Ministry of Economy, Trade and Industry (METI) website showed that it would be subsidising up to 55.7bn yen ($356m) of the project.  

Slated to start supply in 2028, the plant would have reinforced Nissan’s commitment to both EV production and to its domestic market. Nearshoring LFP production would be a key step in ensuring the rigidity of its supply chain at a time when demand for EVs is expected to rise in the region – as indicated by other OEMs similarly taking steps to localise EV and battery production.  

In a statement about the cancellation, the company pointed to the “investment efficiency” of the project as a reason for the decision, and that it was undertaking “immediate turnaround actions” to try and recoup some of its investment – both in this project, and at a wider scale.  

This marks the second cutback to Nissan’s manufacturing footprint in recent months, as it also recently announced the closure of its plant in Wuhan, China. The closure and cancellation are indicative of a company-wide re-examining of its operations, which is especially pertinent as the company released an updated earnings estimate last month, revealing that it expects a record net loss this year to the tune of 700bn yen to 750bn yen ($4.8bn-5.14bn).  

Using digital strategies to overcome disruption at Nissan

While not as sudden or as unexpected as external shocks, such as tariffs, changes to manufacturing or production capabilities can still cause significant disruption to supply chains – not just for FVL, but also for the flow of parts. Having an effective and efficient management system is the key, and this is something that Nissan has made headway in introducing.  

Speaking at Finished Vehicle Logistics North America earlier this year, Ben Shain, senior manager of vehicle logistics at Nissan North America, explained the steps that the carmaker has taken to streamline processes and use digital tools to boost performance. Shain pointed to increased granularity in performance analysis through quantifiable metrics as a core strategy to reduce the logistical cost per unit, as well as leveraging past and present pipeline data to identify inefficiencies. In the face of project cancellations and restructuring, such measures may prove critical in maintaining operational efficiency.