JAKARTA - Nissan surprisingly announced the cancellation of plans for the construction of an electric vehicle battery factory (EV) worth around 153.3 billion yen (equivalent to Rp125 trillion) on Kyushu Island, southwest Japan. This decision is in the midst of a sharp spotlight amid Nissan's efforts to bounce back from the crisis.
Earlier, in January, Nissan enthusiastically announced an ambitious plan to build an lithium iron phosphate (LFP) battery factory in the city of Kitakyushu. The project is predicted to create around 500 jobs and become an important milestone in Nissan's electrification strategy.
However, in an official statement on Friday, May 9, as reported by Reuters, Nissan indicated a change in priority.
"Nissan took immediate turnaround action and explored all options to restore its performance," the company said in a statement, hinting at an adjustment to Nissan's ambition scale in the domestic market.
Furthermore, Nissan stated, "After careful consideration of investment efficiency, we decided to cancel the construction of a new LFP battery factory in Kitakyushu City, Fukuoka Prefecture."
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Not only that, other news circulating mentions that Nissan is also preparing to offer an early retirement program to several hundred staff in Japan. A report from the Nikkei daily mentions that this step will be a reduction in the number of domestic employees in the first 18 years. Although Nissan declined to comment on the Nikkei report, the restructuring signal is getting stronger.
The cancellation of this battery factory comes amid Nissan's intense restructuring efforts under the leadership of new CEO Ivan Espinosa, who took over from Makoto Uchida last month. The company is currently doing cuts in the number of employees, production capacity cuts, and factory closures globally. Previously, Nissan had announced plans to cut 9,000 jobs and reduce global capacity by 20 percent. Japan's last early retirement program was carried out in 2007, with 1,500 jobs cut in response to production cuts in the shrinking domestic market.
The Japanese government itself has previously allocated subsidies of up to 55.7 billion yen for this battery factory project. The plant, which is planned to have an annual production capacity of 5 gigawatt-hours, is expected to start operating in July 2028 or after.
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