Nissan to make electric-car batteries in UK and Portugal

Car manufacturer Nissan says it will invest over £400 million in two plants to make batteries for electric vehicles in Britain and Portugal after securing financial support from their governments.

Automakers around the world are exploring plans for mass electric car production as the industry seeks to haul itself out a devastating downturn.

The Nissan news comes less than a week after Toyota said it would produce its first European-built hybrid car in Britain. It start building the Toyota Auris full-hybrid hatchback in Burnaston, Derbyshire from 2010, with engines produced at its Deeside plant in North Wales.

Nissan is the biggest car manufacturer in the UK by volume, while Toyota is the fourth largest.

Nissan will invest more than 200 million pounds in its plant near Sunderland, north east England, as part of its plan to make and sell environmentally friendly electric cars. About the same amount (250 million euro) will go to building a similar plant at one of a number of possible sites in Portugal.

Each plant would produce 60,000 lithium-ion batteries a year.

"The two governments (UK and Portugal) have offered to extend financial assistance and other support to ensure that Nissan locates the proposed plants within their respective countries," Nissan said in a statement.

UK Prime Minister Gordon Brown said the project would create 350 new jobs and safeguard hundreds more in the supply chain.

"Nissan 's investment in a new battery plant ... here in Sunderland is great news for the local economy," Brown said while visiting the plant, although Nissan axed around 1,200 jobs in the area in January. "Sunderland could now be a strong contender to produce electric vehicles for Nissan in Europe," he added.

The UK site will be the Nissan European mother site for battery production and the centrepiece of a newly established Low Carbon Economic Area (LCEA) in the North East of England, announced by Business Secretary Lord Mandelson, who accompanied the Prime Minister on his visit to Sunderland.

The North East LCEA will focus on ultra-low-carbon vehicles (ULCV), with a training centre specialising in manufacture and maintenance and a research and development centre serving as a home for ULCV research from all five local universities. The government also intends to set up an open-access test track for trials of the new technologies.

Portuguese Prime Minister Jose Socrates said during a signing ceremony in Lisbon that Nissan's decision to build the plant in Portugal "will lead to other investments in electric car projects in Portugal by other car manufacturers."

He said the government plans to boost electric car sales by offering an incentive of up to 6,500 euros to buyers, making it compulsory for new buildings to have charging points and replacing 20 per cent of cars in local government fleets with electric ones by 2011.

Last year the Portuguese government, Nissan and its French partner Renault signed a deal to build 1,300 charging stations for electric cars by the end of 2011.

Nissan Europe vice president Eric Nicolas said in Lisbon the UK and Portugal plants will export batteries to Nissan factories in other European countries and possibly also to other electric car manufacturers.

Nissan plans to have battery production factories in the United States, Europe and Asia.

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