Nissan announces £1bn UK ‘gigafactory’ plan to make electric car batteries in Sunderland

Workers are seen on the production line at Nissan's car plant in Sunderland Britain
Of the £1bn investment, £423m will be put into the Sunderland plant and the production of the new vehicle will create 1,650 jobs, with a further 4,500 roles are expected to be added in the supply chain. Photo: Phil Noble/Reuters

Nissan (7201.T) has revealed plans for a £1bn ($1.4bn) “gigafactory” in Sunderland as part of a electric vehicle expansion.

The move, which will see the Japanese carmaker build its new-generation all-electric model at the site, will create thousands of new jobs for Britain.

Of the £1bn investment, £423m will be put into the Sunderland plant and the production of the new vehicle will create 1,650 jobs, with a further 4,500 roles are expected to be added in the supply chain.

Its Chinese partner, Envision AESC, will spend £450m building a neighbouring giant battery plant, which will have a capacity of 9 Gigawatt hours and the ability to power up to 100,000 Nissan electric vehicles a year, including a new crossover model.

An additional £80m of investment led by Sunderland council will create a “microgrid” of solar and wind farms to power the energy-intensive factories.

Currently the Sunderland factory produces the Nissan Juke, Qashqai and electric Leaf models.

"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," prime minister Boris Johnson said in a statement on Thursday.

"This is a pivotal moment in our electric vehicle revolution and securing its future for decades to come."

Watch: Nissan 'gigafactory' to create 1,650 jobs

It is hoped the new plant will be operational by 2024, when the level of UK-made car components manufactured in Britain is required to start increasing. This is in line with the terms of the UK's trade deal with the EU.

It also comes amid a ban on the sale of new petrol and diesel cars by 2030 as the UK aims to reduce emissions of greenhouse gases to net zero by 2050.

The ban is not expected to apply to some hybrid cars which use a mixture of electric and fossil fuel propulsion, which could still be sold until 2035.

Nissan’s chief operating officer Ashwani Gupta described Brexit as an “opportunity” for the sector after previous rumours that the company could pull out of the UK if a trade deal was not secured.

“The key success factor for Brexit has always been trade friendly business conditions to sustain our business not only in the UK but in the whole of Europe and thanks to Brexit, Nissan is moving forward to use Brexit as an opportunity,” he said.

Business secretary Kwasi Kwarteng told BBC’s Today Programme: "Let's not forget that a number of years ago people were saying, Nissan would leave the UK as a consequence of Brexit and what's happened is the opposite and they've said they're they're committed to investing here and they're committing to Sunderland and the UK."

Read more: UK car output hit as semiconductor shortage continues to plague auto sector

Earlier this week, a report commissioned by the SMMT said a series of factories producing electric car batteries must be built in the UK to secure the future of the country's automotive industry.

It said the government should announce a "binding target" of 60 gigawatt hours of battery capacity to be in place by 2030.

“Today’s announcement of new investment into battery production in Sunderland is great news for the sector, the region and all those employed locally,” Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders, said. “It also demonstrates the UK automotive industry’s commitment to net zero and that the transition to these new electrified vehicles can be “made In Britain”.

He added: “If we are to build one million electric vehicles by 2030, however, we need more such commitments, with at least 60 GWh of gigafactory capacity in this country by the end of the decade.

“The future competitiveness of our industry depends on securing these investments but also wider support for manufacturing.”

The move also comes as Britishvolt is set to build a plant on the former Blyth power station site in Northumberland, pledging 3,000 jobs and batteries for 300,000 vehicles a year.

Watch: Chip shortage hits Nissan production