Nissan Motor Co. has announced it will abandon a plan to build a $1.1 billion electric vehicle battery plant on the southwestern Japanese island of Kyushu, the latest change in the struggling automaker’s plans.
Japan’s third-largest automaker had announced in January its plan to build a lithium iron phosphate (LFP) battery plant in Kitakyushu City, which was expected to create approximately 500 jobs with an investment of $1.05 billion.
The company said in a statement regarding the decision, “Nissan is taking immediate action to transform and is considering all available options to restore its performance,” indicating its willingness to scale back its ambitions in the domestic market.
After careful consideration of investment efficiency, we have decided to cancel the construction of a new LFP battery plant in Kitakyushu City, Fukuoka Prefecture.
Regarding job cuts, Reuters reported that Nissan will begin accepting early retirement applications during the current fiscal year, targeting hundreds of employees in local administrative departments.
Nissan announced it will eliminate 9,000 jobs and reduce its global production capacity by 20% as part of its restructuring plans. The last time it announced an early retirement program in Japan was in 2007, when it cut 1,500 jobs to cope with declining production amid a shrinking domestic market.
Nissan previously announced it expected a record net loss of between $4.80 billion and $5.14 billion for the fiscal year ending in March, due to impairment provisions.
The company is scheduled to provide its outlook for the current fiscal year and an update on recovery measures when it announces its full-year financial results soon, according to Reuters.
In addition to Nissan’s financial woes and declining global sales, Trump’s import tariffs have further complicated matters for the Japanese company, which relied on importing its vehicles into the US from its factories in Mexico and other countries.
