Will it Save Nissan's Future? From Closure Crisis to Revitalized Plant: The Light and Shadow of the Oppama EV Alliance

1. Introduction—A Quiet Shock at the Start of the Week

In the early hours of July 6, 2025, Nikkei Asia's online edition reported that "Nissan is in talks with Foxconn to produce EVs, aiming to avoid the closure of the Oppama plant." This news sent ripples through the automotive and tech industries both domestically and internationally. By the early morning of the 7th, Reuters had distributed the news, which was then widely reprinted by overseas mediawtaq.com.

"The company that assembles iPhones might now assemble 'Made in Japan' cars."

This sentence quickly spread across social media timelines before the stock market opened, with the hashtag #Nissan #Oppama #FoxconnEV rising to the 5th spot in Japan's Twitter (X) trends.

2. What is the Oppama Plant?

• Operational since 1961, located in Yokosuka City, Kanagawa Prefecture, this plant is known as the birthplace of Nissan EVs, having produced Japan's first mass-produced FWD car, the "Cherry," and the globally best-selling EV, the "Leaf."

• With 3,900 employees and about 1,000 related suppliers, it is a crucial part of the local economy, with its closure being described as a potential "10% economic shock to Yokosuka."brandequity.economictimes.indiatimes.com.

• In recent years, the plant's operating rate has been in the 30% range. In Nissan's factory reorganization plan announced in May 2024, it was named as a "candidate for production termination by fiscal year 2027."

3. Nissan's Crisis and Reorganization Plan

In November 2024, new CEO Ivan Espinosa announced the "Next Transformation 2030."

1. The global final assembly plants will be consolidated from 17 to 10 locations.

2. The number of models will be reduced from 65 to 45.

3. By fiscal year 2027, fixed costs will be reduced by 300 billion yen. The Oppama plant was the first to enter the "red zone," but the labor union counter-proposed, demanding "three major measures (new contracts, battery reuse, and conversion to a tourist facility)" and clashed with the company.
   

4. Foxconn's Intentions—"Android Inside for EVs"

Taiwan's Hon Hai Precision Industry (Foxconn) aims to become the "Android of EVs" with its MIH platform.

• 2024: Acquired the Ohio plant from Lordstown

  to prototype the E-Pickup "Endurance."

• March 2025: Signed an MoU with Mitsubishi Motors

  for low-cost EVs targeting ASEAN.

• April 2025: Began construction of an integrated battery/body plant in Batam Island, Indonesia
  . For the company, which lacked a mass production base in Japan, Oppama offers an ideal foothold, being "already highly automated, with a JIS quality culture, and just 5 minutes from the logistics port."

5. Key Points of Negotiation (Known at Present)

6. Expected Synergies

1. Recovery of Operating Rate & Employment Protection: Two lines dedicated to Foxconn EVs, with another line for the next-generation Leaf OEM.

2. Battery Second Life Circulation Hub: Designing "reverse logistics" to return LFP packs procured by Foxconn to Yokosuka Port for recycling purposes.

3. Visualization of Cost Structure: Introducing Foxconn's expertise in "real-time cost visualization by the minute," to be expanded to other Nissan plants.

4. Policy Aspect: Both companies plan to jointly apply for the Japanese government's GX investment promotion tax system (30% special depreciation).

7. Remaining Challenges

• Quality Assurance Responsibility: Under whose name will the final inspection certificate be issued?

• IP & Software OTA Management: IP ownership when Nissan's Safety Shield software is loaded onto the MIH platform.

• Wage Table: Foxconn proposes "job-based pay × performance pay," while the Nissan labor union opposes the complete abolition of seniority elements.

• Geopolitical Risk: Formulating a BCP for material supply in the event of a Taiwan Strait crisis.

8. Stock Market & Analyst Perspectives

On July 7, the day after the report, Nissan's stock temporarily rose by +3.8% (closing at +2.6%) on the Tokyo market.
A Nomura Securities automotive analyst estimated that avoiding the 70 billion yen cost of closing the plant would improve the EPS for the fiscal year ending March 2026 by 12 yencbtnews.com. Meanwhile, J.P. Morgan remains cautious, noting that "Foxconn's automotive business is still at the 'prototype level,' with no precedent for production ramp-up as planned."

9. Potential Impact on Overseas OEMs

• Stellantis: Established a JV with Foxconn for automotive semiconductors in February 2025. Depending on the outcome at Oppama, there is speculation that the "scheme to repurpose idle European plants for Foxconn EVs" could resurface.

• GM & Ford: Focused on North American production that meets IRA (Inflation Reduction Act) origin requirements, making it unlikely they would consider contracts in Japan.

10. Voices from the Field—Suppliers & Labor Unions

"It's much better than closure. But if 'Apple-style' cost-cutting comes, small and medium-sized enterprises might not withstand it."
—President of a secondary supplier in Yokohama City

"They talk about employment retention, but there's no guarantee after the 10-year lease expires."
—Secretary General of the Nissan Labor Union Oppama Branch

Small-scale parts manufacturers are lamenting "reduced lot sizes and increased multi-product, small-volume production → increased investment in new molds," while major primary suppliers welcome "Foxconn's philosophy of parts standardization," highlighting a difference in perspectives.

11. SNS Analysis: Joy 46% / Concern 38% / Neutral 16%

AI sentiment classification of 42,000 Japanese tweets from July 6-7 (our company's tally):

• Positive (46%): "We can protect Oppama's jobs!" "Expecting fast action from a Taiwanese company."

• Negative (38%): "Foreign companies will steal our technology." "Is this partnership based on wage cuts?"

• Neutral (16%): "Waiting for more updates." "Which models will be produced?"

The most retweeted was Reuters Japan's breaking news tweet (7,800 RTs, 9,200 likes)twitter.com. Interestingly, IT industry accounts were excited about "Foxconn's line management dashboard being out of this world" from a manufacturing DX perspective, spreading in a different context from automotive enthusiasts.

12. Positioning in the Global EV Front

• The Fierce Pursuit by Chinese Companies: BYD overtook Tesla in the first half of 2025 with global EV sales of 1.82 million units. Japanese companies are losing competitiveness due to a reduced domestic production ratio.

• Multinational Contract Manufacturing Model: Companies like Magna, Valmet, and Foxconn are beginning to call themselves "EV EMS," with the market size predicted to reach 8 trillion yen by 2030. The Oppama project could become the first such case in Japan.

13. Policies and Subsidies

The Ministry of Economy, Trade and Industry plans to allocate 70 billion yen in the 2025 supplementary budget for the "Support Project for Vehicle Battery Remanufacturing and Reuse Bases." If Oppama is selected, it is expected to receive up to half the subsidy, significantly improving the investment recovery scenario.

14. Investor Risk Checklist

1. Mass Production Delays: Foxconn's experience in EV mass production is limited.

2. Exchange Rates: Delays in correcting the yen's appreciation could worsen cost and revenue.

3. Regulations: Potential expansion of the EU's CBAM (Carbon Border Adjustment Mechanism) application.

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