Nissan has abandoned a $500 million plan to build all-electric vehicles at its Canton, Mississippi assembly plant, the company said in a statement to Automotive News. The automaker will instead shift production to conventional gasoline and hybrid vehicles at the 4.7-million-square-foot facility. It made the move to “better align with market conditions, customer demand and Nissan’s updated strategic direction,” Nissan told AN in a statement. 

As part of “Ambition 2030,” Nissan announced in 2021 that it would retool its Canton facility to build EVs along with batteries for multiple Nissan and Infinity models, with the aim of selling 200,000 EVs in the US by 2028. Tepid US EV sales and the Trump administration’s elimination of the $7,500 federal tax credit caused the company to rethink that plan, though. 

Last year, Nissan cancelled the Ariya electric crossover in the US along with two electric sedans, and now, the automaker has completely dropped its plan to expand Canton, where all its US EVs including the upcoming PZ1K were to be built. The company has three US manufacturing plants (Canton, Smyrna, TN and Decherd, TN), but only made one EV — the Ariya — in the US. 

Instead, it will manufacture ICE and hybrid vehicles at that facility, starting with a new body-on-frame Xterra, set to arrive in the US by 2028. That will be followed by the three-row Nissan Frontier and at least three other models, all built using the same platform.

Other manufacturers in the US including Ford and GM have also cancelled or scaled back EV programs, focusing instead on hybrid or ICE vehicles. In other parts of the world including Asia and Europe, however, EV sales are hitting new highs in the face of record gas prices caused by the US war with Iran.