Nissan will not build its next-gen LEAF in the US, risks losing EV tax credit

The next-gen Nissan LEAF will not be made in the US. Nissan will build the new model in the UK, but the affordable EV risks losing IRA tax credit eligibility.

Nissan confirmed it will build the next-gen LEAF at its Sunderland, UK plant, alongside two new electric SUVs last week.

The Juke and Qashqai, two of Nissan’s top-selling SUVs in Europe, are also going electric. Nissan announced an up to £3bn ($3.8B) investment to build the three new EVs at the plant.

As one of the first mass-market EVs, Nissan’s LEAF was a pioneer. However, with battery and other tech developments, more advanced EVs have stolen the compact electric cars shine.

The LEAF was the best-selling EV (cumulatively) until Tesla’s Model 3 overtook it in early 2020. Model 3 deliveries began in 2017, and it became the top-selling model in 2018 and 2019.

LEAF sales continue to slide amid new competition. Sales are down significantly this year in every major market through September, including the US (-37%), Europe (28%), and Japan (-15%).

The next-gen LEAF will be the first of the three new EVs built at its Sunderland factory. According to Automotive News Europe, it will launch at the end of next year.

Nissan pulls next-gen LEAF production from the US

With plans to build the new LEAF in the UK, where does that leave North America? Sources told Automotive News that Nissan does not plan to build the new LEAF in the US.

The LEAF kicked off a new era as the first mass-market EV in the US, but production of the current model is expected to end in 2025.

The decision could set the LEAF further back than it already is. Nissan’s LEAF is known as an affordable EV, yet the company plans a drastic makeover.

Nissan will release the next-gen LEAF as a crossover coupe SUV to make it more competitive. It will include a sleeker, lower design to avoid competing with its other electric crossovers.

A source from Nissan said the design is closer to the Ariya, the company’s first electric SUV. Another said it was a “mini Ariya.” Nissan said it has already been previewed in its Chill-Out concept.

The Chill-Out concept is a “mobile haven,” according to Nissan. It features advanced safety tech and a comfortable interior. The concept is based on the CMF-EV platform, which powers the Ariya. It also includes Nissan’s e-4ORCE electric 4WD control system.

Nissan’s new LEAF will look nothing like the current generation with a complete design change. It will also feature 25% more range, Nissan told retailers.

However, how popular will the new Nissan LEAF be in the US without the tax credit? Importing the model from the UK would lose its eligibility for an up to $7,500 credit.

One dealer said the subsidy is critical for a brand like Nissan with a “price-sensitive” customer base. “Without that tax incentive, it will be extremely difficult to compete in the United States,” the dealer said.

They added, “We have one hand tied behind our back when selling these EVs.” The dealer went as far as to say, “Why would we even bring this car to the United States?” without tax credit eligibility.

Electrek’s Take

Nissan, which was once viewed as a leader in the EV industry with the launch of the LEAF in 2010, has fallen behind.

The automaker is vowing to make a comeback with a nearly $18 billion investment to launch 15 new EVs globally by 2030. Nissan is also investing $500 million in its Canton, Miss plant to prepare for EV production.

As per Nissan’s production schedule, the first EVs will be a pair of sedans in 2026. The LEAF replacement is expected to launch in the US in 2025.

Without the tax credit, however, Nissan will face stiff competition. Nissan has sold just over 10,000 LEAF models in the US through September.