Japanese automaker Nissan announced plans to spend $250 million to establish an EV production hub at its US engine factory in Decherd, Tennessee. That enormous amount brings the automaker’s US electrification investment to a whopping $750 million.
While Nissan CEO Makoto Uchida did not disclose any further details, it was clarified that the investment is a critical step for the automaker to keep pace with the increasing EV demand in the US.
Global EV demand is expanding faster than anticipated
Nissan CEO Makoto Uchida realized that the global EV demand is increasing faster than the automaker anticipated. Now, it has been trying to keep up with the industry.
In 2022, it invested $500 million to upgrade its assembly plant in Canton, Mississippi, to produce two all-electric sedans for Nissan and Infiniti by 2025. It prompts the automaker to build enough supply of electric motors, which may hint at the purpose of the Decherd plant investment.
Currently, Nissan’s Tennessee operation produces 1.4 million internal combustion engines annually. It also manufactures Leaf‘s electric motor at the nearby Smyrna facility. As Automotive News reported, it is logical to expect that the additional $250 million investment will increase Decherd’s output of e-motors.
Nissan’s target
Nissan set its electrification target in 2021, aiming for 50% of its global sales be electric vehicles by 2031. At the same time, the Japanese automaker further forecasted EVs to account for some 40% of its US sales.
In an interview conducted on January 20 at Nissan’s international headquarters, CEO Uchida stated that the automaker now forecasts exceeding those targets in each market. The US, which is significant to Nissan’s electrification strategy, is included in the expanded target.
CEO Uchida reasoned that the government’s support, such as the Inflation Reduction Act (IRA), effectively promotes EV uptake. He further claims that the new US regulation will boost the EV US market share in the future.
Nissan’s US expansion plans
CEO Uchida also announced additional investments will be made in the US as part of Nissan’s previously disclosed goal to invest $15.58 billion (2 trillion yen) in global electrification through 2026.
On March 31, 2024, the automaker is scheduled to present an updated US electrification target.
Apparently, Nissan plans to focus on all-electric vehicles rather than e-Power hybrids as these are less fitted to the US’s fast and long driving settings.
“The world is evolving. If we don’t get out of our comfort zone, we will be left behind.”
Nissan CEO Makoto Uchida
As a result of the tremendous pollution caused by humans, the world is indeed beginning to adopt sustainable technologies, particularly in electrifying transportation. Nissan now intends to keep up with the rising demand brought on by the global push to promote EVs.
