Nissan's EV Strategy Shifts
Nissan Halts Electric Qashqai Development at Sunderland Amid Cost Cuts and Shifting EV Strategy
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Key Points
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Nissan signed a non-binding memorandum of understanding with China's Chery to explore contract manufacturing for other automakers, signaling a move to diversify manufacturing options beyond Sunderland.
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Nissan has closed one of two production lines at Sunderland due to faltering demand, impacting about 6,000 workers at Britain's largest car plant.
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The company is in talks with the UK government for financial support to plan Sunderland's future, with any assistance likely tied to commitments on new models and updates to the plant roadmap.
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Even if the electric Qashqai project is revived, it is unlikely to reach the market before the early 2030s, a timeline pushed by the current cost-cutting and restructuring.
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Nissan is halting plans for two electric SUVs at its Canton, Mississippi plant in favor of hybrids, as part of a broader shift away from certain EV projects.
Nissan has quietly halted development of a fully electric Qashqai, its best-selling model in Europe, as part of a sweeping cost-cutting drive, Reuters reported on June 23. Even if the project is revived, it is unlikely to reach the market before the early 2030s.
The decision is part of Nissan's "Re:Nissan" restructuring plan, which targets 20,000 job cuts and the closure of 7 factories by 2027. It comes after the company posted a net loss of 533.1 billion yen — roughly $3.53 billion — for fiscal year 2025, according to GuruFocus.
Sunderland Plant Loses a Production Line and a Future Model
Britain's largest car plant, in Sunderland, now runs on just one of its two production lines after Nissan shut the second due to falling demand, The Guardian reported. The plant employs about 6,000 workers and once produced 35% of all British-made cars. It is now running at roughly 50% of its 600,000-unit capacity.
Nissan CEO Ivan Espinosa said the Sunderland site is "very cost-competitive" but is "missing volume, which is why we are consolidating to one line." The company is in active talks with the UK government for financial support. Any deal is expected to be tied to firm commitments on new models and a updated plan for the plant's future.
Nissan Signs Deal With Chinese Rival to Fill Its Idle Factory
To keep the idle Sunderland line busy, Nissan signed a non-binding agreement with China's Chery in June 2026 to explore contract manufacturing. Under this kind of deal, Nissan would build cars for Chery at its own plant — essentially renting out its factory floor to a competitor, The Guardian noted.
Analysts say the Chery deal could make Sunderland a back door for Chinese cars into Europe, potentially bypassing trade tariffs. Chery's brands, Omoda and Jaecoo, already hold close to 7% of the UK market. Nissan's own UK market share has fallen to just 3.7%, according to Reuters.
Electric Qashqai Shelved as Nissan Bets on Hybrids Instead
Nissan is not walking away from electric cars entirely. It still makes the new third-generation Leaf at Sunderland and recently unveiled an electric Juke. But the company is cutting its global model lineup from 56 to 45, and the electric Qashqai did not survive the cull, Reuters reported.
The shift mirrors moves in the US, where Nissan scrapped a $500 million plan for two electric SUVs at its Canton, Mississippi plant, choosing gas-powered trucks and hybrids instead. The company says volatile EV demand in Europe makes a "balanced" approach — mixing EVs with hybrids — the right call for now.
UK Government Faces Pressure Over Jobs and Green Targets
UK Business Secretary Peter Kyle is leading talks with Nissan over a support package to secure the Sunderland plant's future. The UK's Zero Emission Vehicle mandate requires 80% of new car sales to be electric by 2030 — a target many car makers now call unrealistic, according to The Guardian.
Labor unions are calling for "iron-clad guarantees" that Sunderland will not become purely a contract factory for foreign brands. Critics warn that shelving the electric Qashqai hollows out the UK's EV supply chain. Supporters of a softer mandate argue that without flexibility, Nissan may leave the UK entirely — taking all 6,000 jobs with it.
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