Nissan Scraps $500 Million US EV Plant Plans Amid Policy Shifts
Nissan has abandoned its ambitious project to manufacture all-electric vehicles at its Mississippi facility, citing a lack of market demand and changes in federal incentives as the primary drivers for the decision.
Nissan has officially cancelled its $500 million initiative to manufacture all-electric vehicles at its Canton, Mississippi assembly plant. The automaker confirmed in a statement to Automotive News that the 4.7-million-square-foot facility will revert to producing conventional gasoline and hybrid vehicles instead. This strategic pivot marks a complete reversal of the company's 2021 roadmap, which had planned to retool the site for electric vehicle and battery production.
The decision aligns with an update to Nissan's "Ambition 2030" strategy, driven primarily by sluggish sales of electric vehicles in the United States. Nissan cited tepid US EV sales and the elimination of the $7,500 federal tax credit by the Trump administration as the key factors forcing this rethink. Previously, the firm aimed to sell 200,000 EVs in the US by 2028, a target that is now effectively abandoned alongside plans to expand production for models including the upcoming PZ1K.
Under the new direction, the Canton plant will cease manufacturing the Ariya electric crossover and other EV models that were slated for the US market. Instead, production at the facility is scheduled to commence with a new body-on-frame Xterra, set to arrive in the US by 2028. This will be followed by the three-row Nissan Frontier and at least three other models, all built using the same platform as the new Xterra.
This move sees Nissan joining other major US manufacturers, such as Ford and General Motors, in scaling back their electric vehicle programs in favour of hybrids or internal combustion engine vehicles. While Nissan operates three manufacturing plants in the US—Canton in Mississippi, and Smyrna and Decherd in Tennessee—it had previously been the only major manufacturer producing a single EV model, the Ariya, within the country.
Conversely, electric vehicle sales in Asia and Europe are reportedly hitting new highs, driven in part by record gas prices linked to geopolitical tensions involving the US and Iran. Despite these divergent global trends, the specific timeline for the full transition of the Canton plant to ICE and hybrid production beyond the 2028 start date for the Xterra remains undetailed in the company's current communications.
