Nissan has officially scrapped its plans to produce a subcompact electric crossover in the United States. The vehicle, known internally as PZ1L, was originally set to be manufactured at Nissan’s facility in Canton, Mississippi. However, sources confirm that the automaker has decided to relocate production to its Sunderland, England plant instead. (via Automotive News)
A Changing EV Landscape
The decision to cancel the U.S. production of PZ1L comes at a time of uncertainty in the electric vehicle (EV) market. While Nissan was an early pioneer in EVs with the launch of the Leaf in 2009, the company has struggled to maintain its foothold in the sector. Despite investments in the larger Ariya crossover, Nissan has faced declining sales, financial instability, and increasing competition from both legacy automakers and new EV startups.
Several factors have influenced Nissan’s decision. Industry analysts suggest that slow EV adoption rates, supply chain constraints, and fluctuating consumer demand for smaller electric crossovers contributed to the cancellation. The U.S. market has shown a stronger preference for larger SUVs and trucks, which may have made the subcompact EV a less viable option for Nissan’s North American lineup.
Financial Struggles and Strategic Shifts
Nissan’s financial difficulties have also played a key role in this strategic shift. The company recently announced a US$2.6 billion cost-cutting plan, which includes a 20% reduction in global production and the elimination of 9,000 jobs. As part of these efforts, Nissan has been in discussions with Honda regarding a potential merger, a move that could reshape the Japanese automotive industry.
Despite these challenges, Nissan maintains that the decision to cancel the PZ1L’s U.S. production is not directly tied to its financial situation. Instead, the automaker emphasizes its commitment to focusing on EV projects that better align with market demand. Nissan still intends to produce two other electric crossovers at its Canton facility, which are expected to cater to American consumers’ preference for larger vehicles.
Political and Market Uncertainties
The political climate in the U.S. has also added to Nissan’s hesitations. With the return of former President Donald Trump to the White House, there is growing uncertainty surrounding EV incentives and regulations. Trump has pledged to dismantle many of the Biden administration’s pro-EV policies, including revoking the $7,500 federal EV tax credit. If these changes materialize, they could significantly impact consumer affordability and demand for electric vehicles in the U.S.
What Comes Next for Nissan?
While the PZ1L will no longer be built in Mississippi, Nissan is not entirely abandoning its EV ambitions. The company is focusing on developing EVs that align more closely with market trends, particularly larger crossovers and SUVs. The Sunderland plant in England will continue to manufacture the PZ1L for European markets, where demand for smaller electric vehicles remains stronger.
