Nissan is scaling back production plans for its next-generation Leaf electric vehicle (EV) due to China’s rare earth export restrictions creating parts shortages, while simultaneously delaying two US-built electric SUVs by nearly a year. The embattled Japanese automaker faces mounting challenges as it adjusts its electrification strategy not only in response to supply chain shock, but also the Trump administration’s elimination of federal tax credits.
The new Leaf, re-envisioned as a compact SUV, is scheduled to launch later in 2025 and is considered crucial to Nissan’s recovery plans. Now, it will see reduced production volumes due to the shortage of rare earth minerals. Kyodo News reports the scaling back could complicate Nissan’s restructuring efforts, which include closing seven of its 17 global factories and hacking away 15% of its global workforce.
In the US, Nissan will postpone production of two mid-sized electric SUVs at its Mississippi plant by approximately 10 months. A Nissan-branded crossover—codenamed PZ1K—will now begin production in November 2028, while an Infiniti variant, PZ1J, has been pushed to March 2029. The US delays come in the immediate wake of President Trump’s ‘One Big Beautiful Bill’, which phases out the US$7,500 federal EV tax credit by 30 September instead of December 2032 as was the case under former Biden policy.
Despite Nissan emerging as an EV pioneer with the original Leaf, its recent setbacks create the real possibility it might fall irretrievably behind competitors. To be sure, other Japanese automakers are making similar moves: Toyota has postponed production of a US-made EV by two years, while Suzuki temporarily suspended Swift production due to rare earth shortages. Without buyer incentives, US EV demand may weaken further, given the ongoing lack of price parity between such vehicles and their internal combustion engine counterparts.
