Nissan warns of $1.8bn annual loss amid supply chain strain and tariff pressures

Nissan Motor Co. Ltd (7201.T) expects an annual operating loss of 275 billion yen ($1.82 billion) as it grapples with lingering supply chain disruptions and the financial toll of U.S. tariffs, the company said on Thursday.

The automaker warned that risks tied to chip shortages and metal supplies would continue to weigh heavily on its second-half performance, even as a recent U.S.-Japan trade deal reduced tariffs on Japanese cars to 15%, offering some relief.

“We have mitigation measures in place to reduce the impact of tariffs,” Chief Financial Officer Jeremie Papin told reporters. “But free cash flow will remain negative for the full year due to ongoing supply chain risks.”

Tariffs ease, but losses persist

The new trade agreement between Tokyo and Washington will lower Nissan’s tariff-related expenses by roughly 25 billion yen in the second half of the fiscal year ending March 2026. Yet, the cost savings are not enough to offset broader headwinds from rising input prices and production bottlenecks.

Japan’s third-largest automaker now expects an operating loss of 30 billion yen for the first half through September, a sharp improvement from the previously projected 180 billion yen loss, driven by lower emissions compliance costs and tighter cost controls.

Despite the progress, Nissan said its net income outlook remains undetermined, reflecting the uncertainty surrounding global trade and production conditions.

Global supply chain pressures deepen

Automakers around the world are racing to secure critical components as the chip crisis and trade disputes ripple through manufacturing networks. Nissan’s challenges mirror an industry-wide struggle that has intensified since restrictions were imposed on Dutch chipmaker Nexperia, limiting exports of key semiconductors.

Papin said the company is also facing fallout from “a fire and aluminum supply issue in North America,” which has affected multiple automakers. “Both challenges are not specific to Nissan,” he emphasized, “but they add pressure to already fragile supply lines.”

The disruptions have raised costs and delayed production timelines for several models, including those under Nissan’s luxury arm, INFINITI, which recently unveiled the QX80 Autograph 2026 in Mexico City — a flagship release meant to reassert the brand’s global presence amid market turbulence.

Eyes on November results

Nissan said it would release detailed second-quarter financial results on November 6, offering investors a clearer picture of how cost-cutting, production adjustments, and tariff relief have affected the company’s bottom line.

While the company is tightening its operations, analysts say sustained geopolitical uncertainty could continue to cloud its recovery path. “Automakers are caught in a perfect storm of trade barriers, raw material volatility, and chip shortages,” said one Tokyo-based industry analyst. “Nissan’s case shows just how global shocks can test even established players.”

Despite the near-term setback, Papin said Nissan remains committed to long-term resilience. “We’re focused on strengthening our supply network, improving cash discipline, and preparing for sustainable recovery,” he said.

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