Nissan Motor Co. is reconsidering its U.S. electric vehicle (EV) expansion plans in response to evolving energy and trade policies under President Donald Trump’s second administration. The Japanese automaker’s decision reflects concerns over the potential rollback of federal incentives critical to EV adoption.
The start date and production levels for EVs at Nissan’s Canton, Mississippi, plant—previously slated to roll out four new models starting in 2028—may now hinge on government policy outcomes. Ponz Pandikuthira, Nissan’s chief planning officer for the Americas, confirmed the company’s readiness to begin production as early as 2027 but cautioned that a loss of incentives, such as the $7,500 federal tax credit for EV buyers, could delay or limit manufacturing efforts.
“If the $7,500 credit is scrapped, the rate of adoption will inevitably slow,” Pandikuthira said in an interview. “We cannot afford to produce models for which there is insufficient demand.”
Focus on Hybrid Models as a Contingency Plan
Amid uncertainty, Nissan may shift its strategy toward hybrid vehicles, which continue to gain popularity. The company’s U.S. plant in Smyrna, Tennessee, will play a pivotal role in producing these gas-electric hybrids and plug-in hybrid models, which could balance the company’s portfolio as it navigates fluctuating demand for fully electric vehicles.
“We’re closely monitoring regulatory developments and can adjust our production priorities accordingly,” Pandikuthira added. “This flexibility allows us to optimize resources and align with market conditions.”
Infiniti Production Halt in Mexico
In a separate development, Nissan announced plans to discontinue production of two Infiniti models, the QX50 and QX55 compact crossovers, at its joint venture plant in Aguascalientes, Mexico, by December 2025. The decision was driven by low demand for these aging models, Pandikuthira explained.
The plant, co-owned with Mercedes-Benz Group AG, will not see further Infiniti production, but Nissan has no plans to scale back operations at its other Mexican facilities. These plants continue to manufacture popular models like the Kicks subcompact SUV and Sentra sedan, which remain vital to the company’s U.S. sales.
The move also aligns with broader trade tensions, as Trump’s threats to impose a 25% tariff on vehicles imported from Mexico and Canada could pose risks to profitability.
U.S. Job Cuts and Production Reductions
Nissan is reportedly planning to cut approximately 2,000 jobs in the U.S. this year, according to Japanese media reports. The job reductions are part of a broader effort to address sluggish sales and financial challenges. Closing production lines at its Tennessee and Mississippi plants would reduce U.S. output by about 25%.
Although Nissan declined to confirm the report, spokesperson Shiro Nagai noted that the company had previously announced plans to cut 9,000 jobs globally and reduce production capacity by 20% to regain financial stability.
Revamping U.S. Strategy Amid Global Challenges
Nissan’s recalibrations come as the company seeks to revitalize its U.S. operations and navigate the shifting automotive landscape. With the EV market reliant on favorable incentives and infrastructure development, the automaker’s cautious approach highlights the complexities of balancing innovation with market realities.
“We are committed to delivering products that meet consumer needs while ensuring the company’s long-term sustainability,” Pandikuthira concluded.
As Nissan adjusts its plans, the company remains poised to respond to regulatory and market dynamics, reaffirming its focus on efficiency and adaptability in an ever-evolving industry.
