Nissan and Jatco Cancel UK EV E-Axle Production Plan Amid Restructuring

Nissan Motor Co., Ltd. and Jatco Ltd. have decided to cancel their previously announced plans to manufacture electric vehicle e-axles in the United Kingdom. The companies confirmed that the project withdrawal is part of Nissan’s wider restructuring initiative aimed at optimizing operational efficiency and adjusting global manufacturing priorities. Jatco had initially targeted 2026 to begin localized production and planned to supply the e-axles to Nissan’s Sunderland vehicle manufacturing facility.

The canceled initiative involved production of Jatco’s latest-generation 3-in-1 e-axle system, which integrates the motor, inverter, and reduction gear into a single compact unit. The technology was expected to support the next-generation Leaf and other future electric vehicle models produced for the European market. Despite the strategic importance of the program, weakening market conditions and lower-than-expected demand for EV models in Europe contributed to the reassessment of the investment plan.

Planned UK E-Axle Investment Overview

Under the original strategy, Jatco intended to establish the e-axle manufacturing operation in the UK to strengthen regional supply chain localization and improve support for Nissan’s electric vehicle production footprint. However, the companies have now confirmed that manufacturing of the e-axle system will continue at Jatco’s facility located in Fuji City, Shizuoka Prefecture, Japan. This decision allows the firms to consolidate production activities while limiting additional capital expenditure during an uncertain market environment.

The restructuring move also follows weak sales performance for the Leaf in Europe. Although the model transitioned to a new generation in fiscal 2025, market demand remained significantly below expectations. Sales reportedly declined by 98.9% year-on-year, reaching only 87 units during fiscal 2025. The sharp downturn highlighted ongoing challenges for legacy EV models in increasingly competitive regional markets where pricing pressure and changing consumer preferences continue to reshape purchasing trends.

Industry observers view the cancellation as another sign that global automakers are reassessing electric vehicle investment timelines and production localization strategies. Rising operational costs, uneven EV adoption rates, and slower market growth across parts of Europe have forced manufacturers to prioritize cost control and operational flexibility. Nissan’s restructuring measures are expected to focus on improving profitability while maintaining competitiveness in future electrification programs.

Frequently Asked Questions

Why did Nissan and Jatco cancel the UK e-axle production plan?
Nissan and Jatco canceled the UK e-axle production project as part of Nissan’s broader restructuring strategy focused on operational optimization and cost management. The decision was also influenced by weaker-than-expected EV demand in the European market, particularly declining sales of the Nissan Leaf. Instead of establishing local manufacturing operations in the UK, the companies decided to continue producing the e-axles at Jatco’s existing facility in Fuji City, Japan, allowing them to reduce investment risks and streamline manufacturing operations.

What was the original scope of the UK e-axle manufacturing project?
The original project involved setting up local production of Jatco’s latest-generation 3-in-1 e-axle system in the United Kingdom starting in 2026. The facility was expected to support Nissan’s Sunderland plant and supply components for electric vehicle models including the Leaf. Jatco planned to invest GBP 48.7 million into the site, create around 180 jobs, and establish an annual production capacity of approximately 340,000 units. The project was intended to strengthen localized EV supply chain operations within the European automotive market.