Nissan cancels plans for two US-made EV sedans

Nissan cancels plans for two US-made EV sedans

  • 6 hours ago
  • thedriven.io
  • Keywords: AI, Startup

Nissan has canceled plans to produce two US-made electric sedans and is reevaluating two battery-electric crossovers due to declining profits, leadership changes, and challenges adapting to electric vehicles. The company's struggles include a failed merger attempt with Honda and lower-than-expected sales projections for 2024. Despite these setbacks, Nissan plans to introduce a crossover model in 2028, albeit delayed by a year.

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Estimated market influence

Nissan

Nissan

Negativesentiment_dissatisfied
Analyst rating: Sell

Nissan has decided to cancel the production of two electric sedans, which negatively impacts their EV plans and financial performance.

Honda

Honda

Negativesentiment_dissatisfied
Analyst rating: Buy

Mentioned in context of Nissan's failed merger attempt with Honda, indicating potential negative business relations or outcomes.

Context

Business Insights and Market Implications

Key Facts and Data Points

  • Nissan's Decision: Nissan has canceled plans to produce two electric sedans (codenamed LZ1F and LZ1E) at its US factories.
  • Production Delays:
    • A crossover codenamed PZ1K will begin production in January 2028, delayed by one year.
    • Another crossover (PZ1J) for Infiniti (Nissan's luxury brand) will start in May 2028, four months behind schedule.
  • Sales Projection: Nissan expects 3.35 million units sold in FY 2024, down from 5 million in 2019 due to market competition and sales decline.
  • Strategic Shifts: The company is reassessing its EV development strategy amid changing industry conditions.

Market Trends and Business Impact

  • EV Market Challenges: Nissan's decision reflects broader challenges in the EV sector, including supply chain issues, tariff impacts, and shifting consumer preferences.
  • Global Competition: The move underscores the intense competition in the EV market, particularly from companies like Tesla and traditional automakers accelerating their EV transitions.
  • Production Shifts: The delay in US-based EV production suggests a potential shift in manufacturing focus to other regions or markets with higher demand.

Competitive Dynamics

  • Impact on Competitors: While Nissan scales back its EV plans, competitors like Toyota, Honda, and Ford are ramping up their EV investments. This could widen the competitive gap in the EV market.
  • Consumer Perception: The delay may affect consumer trust in Nissan's EV lineup, particularly in the US market where demand for affordable EVs is growing.

Strategic Considerations

  • Cost Optimization: By canceling sedans and delaying crossovers, Nissan appears to be focusing on more profitable segments or markets.
  • Regulatory Environment: The decision may also reflect adaptation to regulatory changes, such as Trump-era tariffs and reduced incentives for EVs in the US.

Long-Term Effects

  • Market Share Risk: Delays and cancellations could erode Nissan's market share in the EV sector, particularly if competitors capitalize on the opportunity.
  • Investment Implications: The reassessment of EV projects may lead to reallocation of resources, potentially affecting innovation and future product launches.

Regulatory Impact

  • Policy Uncertainty: The decision highlights sensitivity to policy changes, such as tariffs and government support programs for EVs. This underscores the importance of stable regulatory environments for automakers.