Nissan and its partners have unveiled a £2 billion initiative to establish three electric car models at its Sunderland facility in the UK.

The Japanese automaker aims to manufacture electric Qashqai and Juke models alongside the next iteration of the electric Leaf at the existing plant, potentially safeguarding around 6,000 direct jobs and additional employment across the country.

To support this endeavor, Nissan emphasizes the necessity of a new “gigafactory” for batteries, in addition to the ongoing construction of another gigafactory by its partner, AESC.

Approximately £1.12 billion will be allocated to prepare UK facilities, enhance the supply chain for the new models, and train the workforce. Including the gigafactory, the total investment could reach £2 billion.

A feasibility study on expanding the gigafactory operations in Sunderland is underway, and government support is anticipated. Nissan is set to receive £15 million in funding for its research center in Bedfordshire.

The Unite union sees the plan as securing the long-term future of the site and its skilled workforce but calls for increased government support for the automotive industry.

Earlier concerns about the UK’s competitiveness due to higher manufacturing costs have been addressed, with Nissan’s senior vice president emphasizing the need for the right conditions in terms of energy costs, infrastructure, and government support.

The UK government has backed Nissan through the Automotive Transformation Fund, receiving a £2 billion top-up in the Autumn Statement.

While the government’s contribution to Nissan’s project is estimated at around £100 million, discussions are ongoing regarding the exact figures. The government’s support is critical, especially considering the potential impact of Brexit-related tariffs on the automotive industry.

Nissan’s announcement coincides with the confirmation of an “investment zone” for North East England, projected to generate over 4,000 jobs over five years.

Brexit-related concerns, including potential tariffs on car exports between the UK and EU, have prompted automakers to seek post-Brexit trade deals.

Nissan, a major exporter, is pressing ahead with its strategy, emphasizing the importance of major investments like battery production in the UK.

While the UK aims to align with green policies, including a shift to electric vehicles, delays in banning new petrol and diesel cars have impacted forecasts for electric vehicle sales.

The government’s independent economic forecaster predicts that only 38% of new vehicles sold in the UK by 2027 will be electric, down from the earlier projection of 67% in March.

 

 

Last Updated: 27 November 2023