Nissan scraps EV plans at Mississippi plant in favour of hybrids

Nissan has cancelled plans to produce two electric SUV models at its Mississippi plant, citing waning US demand for battery-electric vehicles (BEV) following the September 2025 removal of federal tax credits. The automaker’s North American subsidiary confirmed the decision to dealers and suppliers on 1 May, with spokesperson Ashli Bobo telling Bloomberg that Canton “does have a future that will include diverse powertrains, but it will not include [BEVs].”

The cancellation, first reported by Nikkei, what had been a steadily contracting commitment to its logical conclusion. Nissan originally planned to launch four all-new electric models at Canton by 2028, a figure it hacked down to two as recently as early 2025, when the company still maintained it was on track for a BEV launch that year. That target was pushed back by up to a year in July 2025 before being abandoned entirely. 

In place of the electric programme, Nissan will expand production of conventional and hybrid powertrains at the site, anchored by a V6-powered hybrid version of the revived Xterra SUV. The pivot reflects both the deterioration of Nissan’s financial position and a broader recalibration of the US car market under President Donald Trump. His administration’s cancellation of the US$7,500 consumer electric vehicle tax credit has depressed demand, with market share collapsing from a record 10.6% during Q3 2025 before stabilising around 5.8% in Q1 2026. 

Trump-era trade barriers have also rendered imported electric models—including Nissan’s Ariya, built in Japan and subject to a 15% import tariff—commercially unviable against domestically manufactured rivals. Nissan’s US strategy has shifted toward its proprietary e-Power series hybrid technology and a plug-in hybrid Rogue offering 38 miles of electric range. The Leaf, manufactured in the UK and shipped across the Atlantic, is being retained as an entry-level BEV import below US$30,000.

The decision also carries implications for the communities and suppliers that had reorganised around Canton’s anticipated BEV transformation. Nissan had flagged a US$500m investment to retool the plant; that capital has now been redirected, and the supplier consolidation under Re:Nissan—targeting a 70% reduction in parts complexity—is bearing down on the local Mississippi supply chain regardless of the electrification walkbacks.

As it stands, Canton occupies an ambiguous position within Nissan’s wider Re:Nissan restructuring. The plant is not among the seven facilities scheduled for closure or divestment as Nissan reduces its global manufacturing footprint from 17 to 10 sites by 2027. Rather, these plants are in less profitable markets where the automaker is struggling with overcapacity: Japan, Mexico, Thailand, Argentina, and South Africa, respectively.

Now, Nissan’s survival rests on its role producing high-margin trucks and SUVs, principally the Frontier pickup, which remains one of the few consistently profitable nameplates in Nissan’s North American portfolio. That profitability has made Canton both a beneficiary and a casualty of the restructuring logic simultaneously. Workforce reductions through voluntary buyout programmes have already trimmed headcount. Elsewhere, Nissan has warned of the affordability crisis looming over US automotive; it can no longer afford to profitably manufacture entry-level vehicles domestically, nor can it comfortably import them from Mexico due to tariff barriers.