Nissan plans to inject $1.4 billion into its manufacturing plant in northeastern England in order to produce electric models of its top-selling vehicles. This is seen as a positive development for the British government’s efforts to revitalize the struggling economy.
The automaker from Japan produces the Qashqai and Juke crossover vehicles, which run on either gasoline or a gas-hybrid, at their Sunderland factory. This facility has a workforce of 6,000 employees.
Nissan Motor Co. has announced a direct investment of up to 1.12 billion pounds ($1.4 billion) to manufacture electric replacements for two of their models. This funding will also support the development of infrastructure projects and supply chain, including the construction of a new gigafactory for electric vehicle batteries at the same site, according to a press release from the government.
Prime Minister Rishi Sunak expressed that Nissan’s investment is a significant display of trust in the automotive sector of the U.K., which adds 71 billion pounds annually to the economy.
Sunak made a trip to the factory to make an announcement. He took pictures with Jeremy Hunt, the Treasury chief, in front of a blue Qashqai on the assembly line. He also met with workers and received a tour from plant staff. The day before, Hunt shared plans for tax cuts and other budget priorities as the country prepares for a national election next year. This comes at a time when the U.K.’s economic growth is struggling and consumers are feeling the pressure of high inflation.
The Qashqai and Juke hold the second and seventh spots, respectively, as the U.K.’s most popular vehicles of the year. Nissan has also announced plans to produce the next iteration of its longstanding Leaf electric car at the factory.
In 2021, the company announced its intention to construct an electric car at the factory, in collaboration with AESC, a battery supplier owned by Envision in China. AESC currently operates two gigafactories in Sunderland and this new announcement brings the total to three.
Nissan’s President and CEO, Makoto Uchida, stated that EVs are a central aspect of their efforts to achieve carbon neutrality. He also mentioned that they are currently developing electric versions of their main European models, which will pave the way for a new era for Nissan, the industry, and their customers.
By the year 2030, Nissan aims to make all of its passenger cars in Europe electrically powered.
“At the plant, which halted production temporarily for the ceremony, Uchida stated that our vision is now being realized with this announcement.”
The fate of Nissan’s Sunderland plant was uncertain both prior to and following Britain’s decision to leave the European Union in 2016. Those against Brexit argued that a withdrawal from the EU without a trade agreement would negatively impact the British economy, as companies such as Nissan would encounter tariffs on their exports to the EU.
The car manufacturing sector is preparing for a 10% increase in trade tariffs after Brexit, which are expected to come into effect in January. These tariffs could potentially increase the price of new electric vehicles, as they penalize car makers in their specific markets if they do not use enough components from either the EU or Britain.
Several electric vehicle manufacturers may face difficulties in meeting the criteria due to Europe’s delay in battery production compared to Asia. However, Nissan stands out as the sole car company in the United Kingdom with a specialized battery facility nearby.
Nissan, along with other car manufacturers, is taking steps towards producing electric vehicles in the U.K. This decision comes as Sunak has extended the deadline for ceasing the sale of new gas and diesel cars by five years, now set for 2035.
Earlier this year, BMW announced its plans to invest 600 million pounds in its Mini factory located in Oxford, England. The investment is aimed towards producing electric vehicles by 2026.
Tata Sons, the parent company of Jaguar Land Rover, is constructing a 4 billion-pound electric vehicle battery plant in the United Kingdom. This facility is projected to manufacture approximately 40 gigawatt hours of battery cells annually, which can supply half of the U.K.’s electric vehicle battery demand.
Stellantis, the company that owns British car manufacturer Vauxhall, plans to allocate a budget of 100 million pounds to produce electric vans and cars in the northwest region of England.