Nissan: Held impairment test of assets at end-March 2025

Nissan: Held impairment test of assets at end-March 2025

Nissan has announced a significant shift in its strategy to turn around the company's financial performance. The Japanese automaker has decided to scrap plans for a new lithium iron phosphate (LFP) battery plant in Japan, a facility that was expected to be crucial in reducing EV battery costs and keeping up with competitors like BYD [1]. This decision comes as Nissan is considering all options to restore its performance, including cutting around 15% of its global workforce [2].

The new LFP plant, scheduled to produce up to 5 GWh annually, was set to be a key part of Nissan's investment in electric vehicles. The facility was expected to help Nissan reduce EV battery costs by 20% to 30%, with the batteries set to be installed in Nissan's mini vehicles starting in 2028. The plant was also expected to receive up to 55.7 billion yen ($384 million) in government support [1].

Nissan's decision to abandon the LFP battery plant comes amidst a backdrop of weaker sales in key markets like China and North America. The company is facing a potential net loss of up to 750 billion yen ($5.2 billion) for the fiscal year ending March 2025 [1]. This financial strain has led Nissan to announce plans to cut around 20,000 jobs globally, or about 15% of its workforce, and to suspend operations at some domestic factories as part of a restructuring effort [2].

The company is expected to announce its full-year financial results on Tuesday, May 13, 2025. Nissan has already warned of a potential record net loss, with a cumulative loss of between 700 billion and 750 billion yen [3]. This latest development adds to Nissan’s existing restructuring strategy, which had already included a reduction of 9,000 jobs and a 20% cut in global production capacity [3].

Nissan's turnaround efforts are being closely watched by investors and industry analysts. While the company has cited market needs and the need to cut costs as part of its strategy, the scrapping of the LFP battery plant is seen as a significant setback in its long-term EV strategy. Other Japanese automakers, such as Toyota, are also facing challenges in the EV market, with competitors like BYD rapidly gaining market share in key regions [1].

References:
[1] Electrek. (2025, May 12). Nissan scraps $1 billion EV battery plant as alarm bells go off? Retrieved from https://electrek.co/2025/05/12/nissan-scraps-1-billion-ev-battery-plant-as-alarm-bells-go-off/?extended-comments=1
[2] Business Standard. (2025, May 13). Nissan to halt operations at some domestic plants for restructuring. Retrieved from https://www.business-standard.com/world-news/nissan-to-halt-operations-at-some-domestic-plants-for-restructuring-nikkei-125051300423_1.html
[3] The Nation. (2025, May 13). Nissan plans to cut 10,000 more jobs globally. Retrieved from https://www.nationthailand.com/business/automobile/40049903