Nissan is to announce it will build two new electric models in Sunderland, securing the future of the UK’s largest car factory.
The Japanese carmaker will build replacements for its Qashqai and Juke crossover cars, according to a person with knowledge of the plans.
Investment in the factory could reach as much as £1bn, with significant government subsidy expected, according to Sky News, which first reported the story. The
funding is expected to come with assurances that battery production will remain in the UK – a key focus of UK automotive industry policy as it transitions from petrol and diesel to electric cars.
The news will be welcomed by the UK car industry, as well as the factory’s 6,000 workers. It follows recent investment announcements from India’s Tata, which will build a £4bn battery factory to supply JLR, the maker of Jaguar and Land Rover, and BMW, which is spending £600m to upgrade its factory to build electric Mini cars.
On Wednesday, the chancellor, Jeremy Hunt, announced £2bn of government support for investments in zero-emission technology in the automotive sector. Hunt said in his autumn statement that the measure had been “warmly welcomed by Nissan and Toyota”, both of which have large factories in Britain.
The Sunderland plant is Britain’s single largest car factory, capable of making 600,000 cars a year at maximum capacity. However, its output has been significantly lower in recent years as the car industry has struggled with Brexit uncertainty, the coronavirus pandemic and consequent supply chain problems. In 2019 Nissan made a U-turn on a decision to build its larger X-Trail SUV model there, in a decision experts said was not helped by Brexit uncertainty.
The plant makes the petrol models of the Qashqai and Juke, as well as the electric Nissan Leaf. It gets batteries from a factory next door, run by Chinese-owned AESC, that it had previously owned.
The AESC factory can make batteries with about 2 gigawatt hours (GWh) of capacity a year, but it is building much larger facilities that will aim to produce 9GWh by 2024, and eventually 38GWh, enough to make roughly 600,000 car batteries a year to match Nissan’s output.
The link with the British battery gigafactory will become an advantage for Nissan in the coming years, as it will have a secure supply of British-made batteries. That could help it avoid the risk of post-Brexit tariffs on cars exported from Sunderland to the EU.
The tariffs will be imposed on electric cars without UK- or EU-made batteries unless the governments of the two sides can come to an agreement before a 1 January deadline. The Vauxhall owner Stellantis, JLR and Ford have said the tariffs would damage their future electric car production, but the EU has refused to reopen talks on the details of the Brexit rushed through in 2020.
Nissan had separately already announced in 2021 that Sunderland would be an electric vehicles hub, but it has not so far outlined what models it will build there.
The Leaf was for a time one of the world’s leading electric cars, starting production in Sunderland in 2010. However, Nissan did not build on its early lead, and was overtaken by other carmakers in the move to electric technology.
Nissan has pledged to go all-electric in Europe by 2030, and said it would push ahead with the switch in the UK despite Rishi Sunak’s decision in September to push back a ban on petrol and diesel cars by 2035.
A Nissan spokesperson said: “We do not comment on rumours and speculation.”
