News conference at Nissan's Sunderland plant in Sunderland - Ashwani Gupta

Nissan to build £1bn electric vehicle hub in the UK

Image credit: reuters

Japanese firm Nissan is pouring £1bn into a UK-based manufacturing plant for creating a next-generation electric vehicle and its batteries, alongside financial support from the British Government.

With Brexit posing a serious challenge to domestic automakers, Nissan’s commitment was hailed by the government as a sign that the UK’s industry can thrive even outside the EU.

The project has been launched with an initial £1bn investment by Nissan and its partners Envision AESC, a global player in battery technology, and Sunderland City Council. Comprising three interconnected initiatives, Nissan EV36Zero brings together electric vehicles, renewable energy and battery production to create what the company describes as "a world-first EV manufacturing ecosystem".

The initiative, which will be based around Nissan's Sunderland plant alongside battery firm Envision AESC, is expected to create more than 1,600 direct jobs with an extra 4,500 in supply companies. While Nissan said it would build an all-electric vehicle in the UK using £423m of the £1bn committed, it declined to give details about when production might start.

Business Secretary Kwasi Kwarteng suggested that the government has given Nissan significant financial support but declined to give an exact figure.

Nissan’s chief executive officer, Makoto Uchida, said: “This project comes as part of Nissan’s pioneering efforts to achieve carbon neutrality throughout the entire lifecycle of our products. Our comprehensive approach includes not only the development and production of EVs, but also the use of on-board batteries as energy storage and their reuse for secondary purposes.” 

His firm has developed concepts for smart city technologies that use vehicle-to-grid technology and battery storage to improve the distribution of low carbon energy in future cities.

“Our announcement today comes out of lengthy discussions held within our teams, and will greatly accelerate our efforts in Europe to achieve carbon neutrality,” he added.

“Nissan will continue to leverage its strengths in electrification to become a company that continues to provide value to its customers and society.”

UK Prime Minister Boris Johnson said: “Nissan’s announcement to build its new-generation all-electric vehicle in Sunderland, alongside a new gigafactory from Envision-AESC, is a major vote of confidence in the UK and our highly-skilled workers in the North East.

“Building on over 30 years of history in the area, this is a pivotal moment in our electric vehicle revolution and securing its future for decades to come.

Envision AESC already operates a Sunderland-based battery plant that was established in 2012 for the localisation of Nissan Leaf battery production. It hopes the new plant will increase the cost-competitiveness of EV batteries produced in the UK, including through a new Gen5 battery cell with 30 per cent more energy density which improves range and efficiency.

EV hub Sunderland

Image credit: Nissan

A recent survey found that a quarter of British households said they would buy an electric car or plug-in hybrid in the next five years.

The UK’s market for new cars has been floundering since the double whammy of both Brexit and the Covid-19 pandemic. However, figures in April showed an 11.5 per cent increase in March, the first growth in over six months.

Ben Nelmes, head of policy at New Automotive said: “To stay ahead of the curve we need much more investment like this in battery production and charging infrastructure. Despite being a former car manufacturing hotspot, the UK doesn’t currently rank as a top ten global electric vehicle manufacturer.

“Ministers should use every tool in the box to encourage more investment in battery production, but UK regulation currently encourages car manufacturers to focus on making petrol and diesel models marginally more efficient, instead of making the leap to manufacturing fully electric cars.

“The government should replace this regime with a California-style arrangement that would give investors and manufacturers the certainty they need to invest in large scale battery production.”

The total value of public subsidies offered to Nissan to seal the deal is unknown. According to Reuters, Johnson has declined to comment on the details of any financial incentives, stating: “There are ongoing discussions about ways we can support people who are going to bring fantastic green technology into this country; obviously they’re confidential.”

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