Nissan to lead £2bn electric-car investment in Sunderland plant

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Nissan will lead a £2bn investment in its Sunderland car plant to make two new electric models at the site and build a third UK battery factory, the Japanese carmaker said on Friday.

The company said it would invest up to £1.12bn to manufacture electric replacements for the Qashqai and Juke models, which it currently builds alongside the electric Leaf in the North East facility. Its battery supplier, Chinese group Envision, is expected to contribute the rest of the investment.

Envision owns AESC, which supplies Nissan and already runs one large battery plant in Sunderland. It is constructing a second factory on the same site. The location of a third planned factory to supply Sunderland has not been disclosed.

Nissan and Envision’s AESC committed £1bn to building the second battery factory and producing a new electric model to follow the Nissan Leaf in 2021. Friday’s announcement brings the companies’ total investment in new electric cars and batteries to £3bn.

Envision did not immediately respond to a request for comment.

The investment is aided by government funding that may run into the hundreds of millions of pounds, two people briefed on the talks said.

Prime Minister Rishi Sunak on Friday called the investment “a massive vote of confidence in the UK’s automotive industry”. Nissan’s factory, the largest car plant in the UK, will make only electric models by later this decade.

“We will continue to back businesses like Nissan to expand and grow their roots in the UK every step of the way,” he said.

Chancellor Jeremy Hunt this week unveiled £2bn in funding to help the UK car industry switch to making electric vehicles.

In September, BMW pledged £600mn to make electric Minis, while JLR owner Tata announced plans for a £4bn battery gigafactory.

Nissan said on Friday it would also lead a £30mn investment in its research facility at Cranfield in Bedfordshire to develop future models, backed by £15mn of support from the government.

Chief executive Makoto Uchida, who is in Sunderland for the announcement, said the investment put the factory “at the heart” of the company’s plans for the future.

“With electric versions of our core European models on the way, we are accelerating towards a new era for Nissan, for industry and for our customers,” he said.

The Japanese carmaker has committed to selling only electric vehicles in Europe by the end of the decade. In September, Uchida said the world “needs to move on” from combustion engines.

Yet the investment comes as appetite among mainstream buyers for electric vehicles slows.

The Office for Budget Responsibility, the independent fiscal watchdog, this week slashed its forecasts for electric car sales in the UK in 2027, citing higher prices, higher interest rates and confusion caused by the government’s decision to push back a planned ban on new petrol car sales from 2030 to 2035.