YOKOHAMA, Japan — Nissan Motor Co., fresh off unveiling plans to add electric vehicle production at a second U.S. assembly plant, is now contemplating building a third "factory," possibly for EVs, in the region by 2030.
Chief Operating Officer Ashwani Gupta said the Japanese automaker would likely need a new "factory" by the end of the decade under its Ambition 2030 long-term plan.
Gupta did not specify that the new facility would be geared exclusively toward EVs, but the context of his discussion revolved around EVs.
"The way we are progressing, I do believe we will need a new plant," Gupta said on Friday at Nissan's global headquarters here.
He said the move fits with the trend toward localization as Nissan makes electrification a focal point of future growth.
Last November, Nissan said it will invest 2 trillion yen ($16.4 billion) in the next five years to amp up an electrified vehicle push with 23 new entries worldwide by the end of the decade while the company derives 40 percent of U.S. sales from pure electrics.
Surging demand
Gupta said demand, especially for electrified vehicles, is expected to surge once the industry clears the supply chain challenges that have hit production for much of the past year.
"The question is how and when it becomes electric," Gupta said. "But one day it will. I think it may not be a surprise if we announce a new plant in the U.S."
Under its midterm revival plan, which runs through March 31, 2024, Nissan slashed its global production footprint to cut fixed costs and improve efficiency. Now that it has bounced back from two years of losses, Gupta said it is time to start planting investment for future growth.
Currently, Nissan has only two assembly plants in the U.S. – one in Smyrna, Tenn., the other in Canton, Miss.
Nissan launched electric vehicle production in the U.S. with the Leaf hatchback at its Smyrna plant, which began manufacturing the car and its batteries from 2013.
EV production will be added to Canton from 2025.
Nissan said earlier this year it will invest $500 million to turn the Canton plant into a "center for EV manufacturing and technology." Under that overhaul, Canton will produce two new EVs, one for the Nissan brand, the other for Infiniti.
Battery plant
Last month, battery maker Envision AESC, which is partly owned by Nissan, unveiled plans to invest $2 billion to build a battery plant in Kentucky.
That factory, which opens in 2025, will have capacity to supply 300,000 vehicles a year by 2027. It will initially supply Mercedes-Benz’s newly launched EV production line in Vance, Ala.
But the new battery factory will also pitch its wares to other EV makers. It could have plenty of product to fuel new EV offerings from both Nissan or Infiniti.
More localization is needed for several reasons, Gupta said. It enables production to react more quickly to local demand. And it acts as a hedge against market uncertainty and fluctuating exchange rates. And localized production also helps capture various incentives.
A new factory would come after Nissan completes its transition from a discount, volume player to a quality, value brand, Gupta said. That shift is already underway and helped Nissan's return to profitability in the fiscal year ended March 31.
New manufacturing firepower could come in the form of a completely new factory or the expansion of an existing facility, Gupta said.
He did not elaborate on other details such as a possible site, timeline or model types. But the electrification of the Infiniti premium brand, he said, will be an important driver in the need to expand localized production in the region.
"A third new plant or an expansion of an existing plant," Gupta said. "The importance of localization may increase year on year."
