Nissan’s Strategic Move: Halting Electric Sedan Production
Nissan has officially announced the discontinuation of its plans to produce two electric sedans in the United States. Initially, these vehicles were to be manufactured at the Canton, Mississippi plant, aiming for a release in 2026 and 2027. However, according to a leaked memo and confirmation from Nissan, this plan will no longer proceed.
Economic and Strategic Reasons Behind the Decision
Nissan cites economic and strategic factors for this decision. Christian Meunier, head of Nissan’s American division, stated, “The sedan market is shrinking… we have to face reality.” This was reportedly announced during an internal meeting. According to Ponch Pandikuthira, head of product planning, the high cost of electric vehicle batteries remains a significant hurdle, pushing the price of electric sedans above $40,000. This price point makes it challenging for many key customers to consider purchasing these vehicles.
Focusing on SUVs: Meeting Consumer Demand
Instead of sedans, Nissan plans to focus on what American consumers truly want. In a statement to Car and Driver, Nissan emphasized, “Nissan is committed to offering the right products at the right time, in the right place, and at the right price.” The company added, “We actively listen to market data and, most importantly, to our customers’ needs. These insights suggest we must reassess our electric vehicle offerings and prioritize the SUVs that consumers truly desire.” Production will now focus on three electric SUV models for both Nissan and Infiniti, with manufacturing set to begin in mid-2028.
New SUV Models on the Horizon
The first venture vehicle, inspired by the Xterra, is an electric SUV with the codename PZ1K. Originally set for an early 2027 release, production has been postponed to January 2028. The luxury variant under the Infiniti brand, codenamed PZ1J, is slated for release a few months later in May. While a third electric model is under development, Nissan has yet to disclose specific details.
Industry Shifts and Market Dynamics
The automotive industry continues to grapple with tariffs and supply chain issues, but Nissan’s decision to withdraw from the sedan market predates these challenges. The company had already postponed the sedan timeline once in early 2024, indicating internal hesitance regarding this decision.
Positive Outlook on U.S. Manufacturing
Despite these changes, Nissan remains optimistic about its manufacturing base in the U.S. “We are fortunate to have a strong industrial footprint in the U.S.,” said Vinnie Shahani, Nissan’s head of U.S. sales and marketing, in an interview with Motor1. This domestic manufacturing base is expected to provide an advantage as Nissan transitions to SUV production amid regulatory and consumer preference changes.
Final Thoughts: The Road Ahead for Nissan
The suspension of the sedan plans allows Nissan to allocate resources toward more profitable and in-demand segments. However, with the new SUV lineup not arriving until 2028, Nissan faces a long road ahead. Currently, Nissan envisions robust electric crossovers as the key to its electric vehicle future, but whether this prediction holds true will be revealed in the coming years.