Nissan Scraps $1.1 Billion EV Battery Plant, Eyes Cost Cuts To Survive: Report

Nissan Motor Co. Ltd. (OTC:NSANY) reportedly announced Friday that it is scrapping plans to build a $1.1 billion electric vehicle battery plant in Kitakyushu, Japan.

Nissan has canceled plans to build an EV battery plant in Kitakyushu months after signing local agreements. The company cited a review of investments due to weak performance, reported Nikkie Asia.

Initially unveiled in January, the lithium iron phosphate (LFP) facility was expected to create around 500 jobs with a 153.3 billion yen investment.

Also Read: Foxconn Eyes Nissan, Mitsubishi In Japan EV Push To Counter China’s Growing Auto Threat

Facing sluggish vehicle sales in the U.S. and China, Nissan is scaling back growth plans to stabilize its business. Executive Officer Teiji Hirata said, “We apologize for this situation arising over such a short period of time. This is the result of a careful review in light of the business environment.”

Nissan announced that it expects a record net loss of 700–750 billion Japanese Yen ($4.9 billion to $5.3 billion) for fiscal 2025, mainly due to over 500 billion Japanese Yen in asset write-downs and 60 billion Japanese Yen in restructuring costs. In response, it is cutting jobs, closing plants, and reducing output, while CEO Ivan Espinosa pointed to strong cash reserves of 1.5 trillion Yen to support recovery efforts.

In February, Honda Motors (NYSE:HMC) signaled it could resume $58 billion merger talks with Nissan if CEO Makoto Uchida steps down, after prior talks collapsed over ownership terms.

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This article Nissan Scraps $1.1 Billion EV Battery Plant, Eyes Cost Cuts To Survive: Report originally appeared on Benzinga.com