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Automotive Industry
Nissan is set to cut production of the relaunched Leaf EV to half of what was originally planned this autumn. The cut has been attributed to delays in securing batteries.
The production cuts at Nissan’s plant in Tochigi, Japan will affect the period between September and November, with the steepest reductions being in September and October. Nikkei Asia reports that production has been cut by up to several thousand units in some of these months, with this seemingly confirmed by Nissan officials.
The cause? Battery supply. Nissan’s Tochigi plant uses batteries procured from the Yokohama-based AESC, a battery maker that the company part-owns. Production yields of batteries used in the Nissan Leaf have reportedly not improved in line with expectations, meaning the car company has fallen short of sufficient supply for its newly redesigned Leaf.
This could spell trouble for the Japanese company, which has staked its commercial comeback on the 3rd gen Leaf. The “all-new” version of the world’s first mass-produced EV is scheduled for launch in the US by autumn, Japan by the end of the year, and Europe in 2026. It features over 30 per cent larger range and a full redesign in an SUV style.
More importantly, the third-gen Leaf is seen as the key to Nissan’s fortunes; in the fiscal year ending March 2025, Nissan posted net losses of 670.7bn yen (€3.8bn) despite profits of 426.6bn yen in the year prior. In April, the company appointed Ivan Espinosa as president, who formulated a recovery strategy (“Re:Nissan”) encompassing restructuring, factory consolidation, and new model launches – with the updated Leaf being seen as critical to this effort.
So far, this strategy has seen Nissan announce plans to cut its workforce by a total of 20,000 employees between the financial years 2024 and 2027, including the previously announced reduction of 9,000 employees. The company also said it would close seven of its 17 production facilities worldwide as part of efforts to streamline operations and improve cost-efficiency across its EV and ICE business. And, in July, it also delayed US production of two of its midsize electric SUVs by up to a year. All of this is to say that a battery shortage is probably the last thing the company needs right now.
What still isn’t clear is the impact this will have on the European version of the car, which is set to be manufactured at Nissan’s plant in Sunderland, UK. It remains to be seen whether the production cuts being carried out in Japan will be extended to this plant, or indeed other facilities in the region.